Worker Mobility and Domestic Production Networks

Marvin Cardoza, Francesco Grigoli (), Nicola Pierri and Cian Ruane

No 2020/205, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; production network; connected firm; firm pair control; worker flow; origin firm; hiring firm; dummy variable; buyer-supplier relationship; Labor mobility; Wages; Productivity; Human capital; Trade balance (search for similar items in EconPapers)
Pages: 60
Date: 2020-09-25
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Citations: View citations in EconPapers (3)

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