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).