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The Effect of Learning by Hiring on Productivity

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Abstract

This work studies the phenomenon of inter- rm labor mobility as potential channel of knowledge transfer. Using data from the Danish employer-employee register, covering the period 1995-2005, it investigates how the knowledge embed- ded into recruited workers, coming from other rms, contributes to the process of knowledge di usion and boosts rms productivity. Speci cally, estimating both parametric (Cobb-Douglas) and semi-parametric production functions (Olley and Pakes, 1996; Levinsohn and Petrin, 2003), the impact of recruited technicians and highly educated workers on total factor productivity at the rm level is found to be signi cantly positive. A matching analysis, which allows for contin- uous treatment e ect evaluation (Hirano and Imbens, 2004), corroborates this nding.

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  • Parrotta, Pierpaolo & Pozzoli, Daio, 2009. "The Effect of Learning by Hiring on Productivity," Working Papers 09-11, University of Aarhus, Aarhus School of Business, Department of Economics.
  • Handle: RePEc:hhs:aareco:2009_011
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    File URL: http://www.hha.dk/nat/wper/09-11_pipadpozzoli.pdf
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    Keywords

    Labour mobility; Total factor productivity; Generalized propensity score;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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