Returns to workplace connectivity: evidence from Brazil

Marcelo Arbex, Ricardo Freguglia and Rafael Siano

Applied Economics, 2025, vol. 57, issue 50, 8258-8266

Abstract: We empirically investigate the quantitative effect of workplace connectivity on workers’ wages. Connectivity measures a worker’s rank within the workplace’s connection hierarchy, considering the number of co-workers in the same occupation and firm (workplace) and the relative tenure of immediate co-workers. We construct a connectivity index as the ratio of a worker’s tenure-weighted connections to the total number of connections in the workplace, using a worker’s job tenure and the connections formed over time to obtain a relative measurement of their connectivity. Using a unique dataset from the Brazilian Annual Social Information Report (RAIS), we estimate the (fixed effect) wage equation, controlling for work and firm heterogeneity. Our results show positive and statistically significant returns to connectivity. The effect is particularly pronounced for workers in administrative services and industrial goods production, those at the bottom of the connectivity distribution, and those in medium-sized firms. We also find that a worker’s connectivity is more relevant for wages than their tenure.

Date: 2025
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DOI: 10.1080/00036846.2024.2399162

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