Worker Mobility and Domestic Production Networks
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Summary:
We show that domestic production networks shape worker flows between firms. Data on the universe of firm-to-firm transactions for the Dominican Republic, matched with employer-employee records, reveals that about 20 percent of workers who change firms move to a buyer or supplier of their original firm. This is a considerably larger share than would be implied by a random allocation of movers to firms. We find considerable gains associated with this form of hiring: higher worker wages, lower job separation rates, faster firm productivity growth, and faster coworker wage growth. Hiring workers from a supplier is followed by a rising share of purchases from that supplier. These findings indicate that human capital is easily transferable along the supply chain and that human capital accumulated while working at a firm is complementary with the intermediate products/services produced by that firm.
Series:
Working Paper No. 2020/205
Subject:
Human capital International trade Labor Labor mobility Production Productivity Trade balance Wages
Frequency:
regular
English
Publication Date:
September 25, 2020
ISBN/ISSN:
9781513557724/1018-5941
Stock No:
WPIEA2020205
Pages:
60
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