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The Complementary Effect of Organizational Practices and Workers’ Level of Education

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Abstract

This paper investigates how rms' productivity is a ected by the relationship between organiza- tional practices and workers' level of education. Using rm-level panel data covering the period 2002 to 2008, I estimate complementarities among workers' level of education and a large set of organizational practices aggregated into three domains: decentralization, incentive pay, and work design where work design comprises job rotation and teamwork. I consider workers with four lev- els of education: no post-compulsory education, upper-secondary vocational education and train- ing, tertiary vocational education, and tertiary academic education. The results indicate that the complementarity between education and the extent of rms' decentralization is higher for tertiary- educated workers. In contrast, the estimations reveal no complementarity between incentive pay and higher levels of workers' education. Furthermore, complementarity exists between work design and tertiary-educated workers, especially workers with a tertiary vocational education. Finally, the estimations using an aggregate measure of organization suggest complementarities across organiza- tional practices.

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  • Filippo Pusterla, 2020. "The Complementary Effect of Organizational Practices and Workers’ Level of Education," KOF Working papers 20-478, KOF Swiss Economic Institute, ETH Zurich.
    • Handle: RePEc:kof:wpskof:20-478
    DOI: 10.3929/ethz-b-000416772
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    More about this item

    Keywords

    complementarity; education; organization; productivity;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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