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Is workers' mobility a source of R&D spillovers?

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  • Elisabetta Magnani

Abstract

Purpose - This study asks whether working in a R&D intensive industry affects a worker's wage profile. If R&D investment translates into transferable human capital or knowledge, workers' mobility constitutes a negative externality from the point of view of the firm/industry that bears the cost of R&D activities. A steepening of the wage profile would address such externality. Design/methodology/approach - Using PSID data combined with US BEA data on US manufacturing industries' R&D intensities between 1981 and 1992, regression analysis is used to explore the hypothesis that, similarly to general training, industry R&D steepens a worker's wage‐experience profile. Findings - In general the evidence is mixed. The results obtained from biennial wage growth regressions support to some extent the hypothesis that exposure to R&D activities allows a specific group of workers to accumulate general human capital for which they pay a positive price in early stages of their career. Research limitation/implications - An important caveat applies to the results. Unlike previous research by Møen who uses firm level R&D, the results found in this study are generated by using industry level R&D, which, being possibly affected by severe measurement errors, may bias the estimated coefficients towards zero. Originality/value - This study complements Møen's evidence based on Norwegian wages with the effects of industry‐specific R&D intensities on the earnings profile in US manufacturing industries. By investigating whether industry R&D affects the return to experience and/or to tenure this study addresses an overlooked issue of which type of skills R&D allows workers to accumulate.

Suggested Citation

  • Elisabetta Magnani, 2006. "Is workers' mobility a source of R&D spillovers?," International Journal of Manpower, Emerald Group Publishing Limited, vol. 27(2), pages 169-188, February.
    • Handle: RePEc:eme:ijmpps:01437720610666191
    DOI: 10.1108/01437720610666191
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