IMF Working Papers

Worker Mobility and Domestic Production Networks

By Marvin Cardoza, Francesco Grigoli, Nicola Pierri, Cian Ruane

September 25, 2020

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Marvin Cardoza, Francesco Grigoli, Nicola Pierri, and Cian Ruane. Worker Mobility and Domestic Production Networks, (USA: International Monetary Fund, 2020) accessed December 4, 2024

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Summary

We show that domestic production networks shape worker flows between firms. Data on the universe of firm-to-firm transactions for the Dominican Republic, matched with employer-employee records, reveals that about 20 percent of workers who change firms move to a buyer or supplier of their original firm. This is a considerably larger share than would be implied by a random allocation of movers to firms. We find considerable gains associated with this form of hiring: higher worker wages, lower job separation rates, faster firm productivity growth, and faster coworker wage growth. Hiring workers from a supplier is followed by a rising share of purchases from that supplier. These findings indicate that human capital is easily transferable along the supply chain and that human capital accumulated while working at a firm is complementary with the intermediate products/services produced by that firm.

Subject: Human capital, International trade, Labor, Labor mobility, Production, Productivity, Trade balance, Wages

Keywords: Buyer-supplier relationship, Connected firm, Dummy variable, Firm pair control, Hiring firm, Human capital, Labor mobility, Origin firm, Production network, Productivity, Trade balance, Wages, Worker flow, WP

Publication Details

  • Pages:

    60

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2020/205

  • Stock No:

    WPIEA2020205

  • ISBN:

    9781513557724

  • ISSN:

    1018-5941