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Differences in On-the-Job Learning across Firms

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  • Arellano-Bover, Jaime

    (University of Rome Tor Vergata)

  • Saltiel, Fernando

    (McGill University)

Abstract

We present evidence consistent with large disparities across firms in the on-the-job learning their young employees experience, using administrative datasets from Brazil and Italy. We categorize firms into discrete "classes" using a clustering methodology which groups together firms with similar distributions of unexplained earnings growth. Equipped with this categorization of firms-which our conceptual framework interprets as skill-learning classes-we document three main results. First, Mincerian returns to experience vary substantially across experiences acquired in different firm classes, and the magnitude of this heterogeneity is associated with significant shifts across the distribution of early-career wage growth. Second, past experience at firms with better on-the-job learning is associated with subsequent jobs featuring greater non-routine task content. Third, firms' observable characteristics only mildly predict on-the-job learning opportunities. Our findings hold among involuntarily displaced workers who have no seniority at their new jobs, which is consistent with a portable skills interpretation.

Suggested Citation

  • Arellano-Bover, Jaime & Saltiel, Fernando, 2021. "Differences in On-the-Job Learning across Firms," IZA Discussion Papers 14473, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp14473
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    Cited by:

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    2. Garcia-Louzao, Jose & Hospido, Laura & Ruggieri, Alessandro, 2023. "Dual returns to experience," Labour Economics, Elsevier, vol. 80(C).
    3. Jose Garcia-Louzao & Gabriel Burdin, 2023. "Employee Owned Firms and the Careers of Young Workers," Bank of Lithuania Working Paper Series 113, Bank of Lithuania.
    4. Ma, Xiao & Muendler, Marc-Andreas & Nakab, Alejandro, 2020. "Learning by Exporting and Wage Profiles: New Evidence from Brazil," MPRA Paper 109497, University Library of Munich, Germany, revised 31 Aug 2021.

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    More about this item

    Keywords

    human capital; on-the-job learning; firms;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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