This paper investigates the impact of a firm’s worker flows on productivity by using unique longitudinal matched employer-employee data. The analysis splits the firm’s total worker flows into three components: workers’ replacements (excess worker flows), hirings meant to increase the firm’s employment level (net hirings), and separations of workers intended to decrease the firm’s workforce (net separations). This allows isolating the impact of workers’ replacements, which represent the most prominent (and compelling) feature of worker mobility. Endogeneity is dealt with by using a modified version of the Ackerberg et al.’s (2015) control function method, which explicitly accounts for firm fixed effects. The main finding is that excess flows foster productivity, and so do net hirings, while net separations hurt it. The effect of excess flows is heterogeneous and varies widely based on the types of replacements, the categories of workers involved, and the types of firms experiencing such flows. Overall, the findings of this paper highlight the importance of reallocation dynamics to reach better employer-employee matches and call for a reconsideration of policies concerning the flexibility of the labor market.
Worker Flows, Reallocation Dynamics, and Firm Productivity: New Evidence from Longitudinal Matched Employer-Employee Data / Grinza, Elena. - (2020).
Titolo: | Worker Flows, Reallocation Dynamics, and Firm Productivity: New Evidence from Longitudinal Matched Employer-Employee Data |
Autori: | |
Data di pubblicazione: | 2020 |
Titolo del libro: | Quaderni del Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche - ISSN 2279-7114, Working paper no. 65 |
Serie: | |
Abstract: | This paper investigates the impact of a firm’s worker flows on productivity by using unique long...itudinal matched employer-employee data. The analysis splits the firm’s total worker flows into three components: workers’ replacements (excess worker flows), hirings meant to increase the firm’s employment level (net hirings), and separations of workers intended to decrease the firm’s workforce (net separations). This allows isolating the impact of workers’ replacements, which represent the most prominent (and compelling) feature of worker mobility. Endogeneity is dealt with by using a modified version of the Ackerberg et al.’s (2015) control function method, which explicitly accounts for firm fixed effects. The main finding is that excess flows foster productivity, and so do net hirings, while net separations hurt it. The effect of excess flows is heterogeneous and varies widely based on the types of replacements, the categories of workers involved, and the types of firms experiencing such flows. Overall, the findings of this paper highlight the importance of reallocation dynamics to reach better employer-employee matches and call for a reconsideration of policies concerning the flexibility of the labor market. |
Appare nelle tipologie: | 2.1 Contributo in volume (Capitolo o Saggio) |
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