Production hierarchies in Sweden

- Swedish occupation data can be used to construct hierarchies within firms.
- The resulting hierarchies conform to theoretical predictions.
- Firms with more layers are larger in size, in value added, and pay higher wages.
- Firms are hierarchical: higher layers are smaller and have higher mean wages.
- Adding layers correlate with firm size/value added increases and wage decreases.

I study the internal organization of firms using Swedish occupation data. The empirical patterns match the theoretical predictions of  Caliendo and Rossi-Hansberg (2012) and are similar to the patterns observed in French data by  Caliendo et al. (2012).