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Department of Economics, Aarhus School of Business, University of Aarhus Working Papers, Department of Economics, Aarhus School of Business, University of Aarhus

No 09-11:
The Effect of Learning by Hiring on Productivity

Pierpaolo Parrotta () and Daio Pozzoli ()

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.

Keywords: Labour mobility; Total factor productivity; Generalized propensity score; (follow links to similar papers)

JEL-Codes: C23; J33; J38; J51; (follow links to similar papers)

55 pages, July 22, 2009

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