Firm Heterogeneity in Skill Returns

Michael J. Böhm (), Khalil Esmkhani () and Giovanni Gallipoli ()
Additional contact information
Michael J. Böhm: University of Bonn
Khalil Esmkhani: University of British Columbia

No 2020-082, Working Papers from Human Capital and Economic Opportunity Working Group

Abstract: This paper presents new evidence on worker-firm complementarities. We combine matched employer-employee data with direct measures of workers' cognitive and noncognitive skills, and propose an empirical approach that separately identifies the firm-level return for each attribute. We find that similar skills command different returns across employers and that workers' sorting into firms depends on returns to both attributes. We derive theoretical restrictions that characterize many-to-one matching in employer-employee data, linking within-firm skill dispersion to between-firm differences in average skills. Estimates support these restrictions. Firm heterogeneity in skill returns raises both the average level and dispersion of earnings.

Keywords: firm heterogeneity; skill returns; sorting; wages; Inequality (search for similar items in EconPapers)
JEL-codes: D30 J23 J24 J31 (search for similar items in EconPapers)
Date: 2020-11
New Economics Papers: this item is included in nep-bec, nep-lma, nep-ltv, nep-ore, nep-tid and nep-ure
Note: M
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Citations: View citations in EconPapers (1)

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http://humcap.uchicago.edu/RePEc/hka/wpaper/Boehm_ ... rogeneity-skills.pdf First version, November 15, 2020 (application/pdf)
http://humcap.uchicago.edu/RePEc/hka/wpaper/Boehm_ ... eity-skills_rev1.pdf Second version, May, 2022 (application/pdf)

Related works:
Working Paper: Firm Heterogeneity in Skill Returns (2023)
Working Paper: Firm Heterogeneity in Skill Returns (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:hka:wpaper:2020-082

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