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Learning by hiring, network centrality and within-firm wage dispersion

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  • Ambra, Poggi
  • Piergiovanna, Natale

Abstract

In this paper, we highlight knowledge as specific channel through which labour mobility affects conditional within-firm wage dispersion. We present a model in which workers acquire knowledge on the job and firms pursue a policy of learning-by-hiring. The latter generates workers flows that connect directly and indirectly firms in a network. The model predicts that firms central to the network, those with the most heterogeneous workforce in terms of past employers, have the highest wage dispersion. Using 1990-2001 Veneto (a region of Italy) matched employer-employee data, we map workers flows between firms and build the network formed by all the firms. For each firm, we assess its network centrality. In our data conditional within-firm wage dispersion turns out to be increasing in network centrality, confirming the prediction of the model.

Suggested Citation

  • Ambra, Poggi & Piergiovanna, Natale, 2017. "Learning by hiring, network centrality and within-firm wage dispersion," Working Papers 369, University of Milano-Bicocca, Department of Economics, revised 19 Aug 2017.
  • Handle: RePEc:mib:wpaper:369
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    More about this item

    Keywords

    Wage dispersion; Labour mobility; Network; Knowledge transfer;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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