This paper examines the impact of performance-related pay on wage differentials within firms. Our theoretical framework predicts that, compared to a fixed pay system, pay schemes based on individual output increase within-firm wage inequality, while group-based bonuses have minor effects on wage...

Labour-market polarization is characterized by increased employment in occupations at the top but also at the bottom of the skills and wage distributions, followed by a relative decline in 'middling' occupations. This paper documents a polarization trend also in the Nordic labour markets and...

Labour market outcomes of immigrants and natives are affected differently by macroeconomic conditions. In particular, we show that earnings of immigrants in Norway from outside the OECD area are more sensitive to local labour market conditions than are earnings of natives. Failure to account for...