Worker Mobility and Firm Productivity

Abstract:

How are wages determined and how do workers bit up their rents? We suggest a model in which wage posting and wage bargaining firms coexist. As a result, workers can increase rents through mobility within as well across firm types. The model provides an interpretation for mobility events with wage increases but to destination firms of apparent lower quality as well as for mobility events with wage decreases to apparent higher quality firms. We estimate model parameters using Austrian matched employer-employee data using a novel, unified estimation procedure based on firm exit rates. We find that firm productivity in our model correlates but is distinct from AKM fixed effects, poaching and page ranks of firms.