Learning by hiring, network centrality and within-firm wage dispersion

Ambra, Poggi and Piergiovanna, Natale

No 369, Working Papers from University of Milano-Bicocca, Department of Economics

Abstract: In this paper, we highlight knowledge as specific channel through which labour mobility affects conditional within-firm wage dispersion. We present a model in which workers acquire knowledge on the job and firms pursue a policy of learning-by-hiring. The latter generates workers flows that connect directly and indirectly firms in a network. The model predicts that firms central to the network, those with the most heterogeneous workforce in terms of past employers, have the highest wage dispersion. Using 1990-2001 Veneto (a region of Italy) matched employer-employee data, we map workers flows between firms and build the network formed by all the firms. For each firm, we assess its network centrality. In our data conditional within-firm wage dispersion turns out to be increasing in network centrality, confirming the prediction of the model.

Keywords: Wage dispersion; Labour mobility, Network; Knowledge transfer (search for similar items in EconPapers)
JEL-codes: J31 J62 L14 (search for similar items in EconPapers)
Pages: 28
Date: 2017-08-19, Revised 2017-08-19
New Economics Papers: this item is included in nep-eur, nep-lma and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:mib:wpaper:369

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