Worker Mobility: Agglomeration, Wage Changes, and Entrepreneurship
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Worker Mobility: Agglomeration, Wage Changes, and Entrepreneurship

  • Author(s): Zeng, Wendy Su
  • Advisor(s): Rauch, James E
  • et al.
Abstract

This dissertation consists of three chapters that discuss worker mobility in the context of agglomeration, wage changes, and entrepreneurship.In Chapter 1, we use the Brazilian RAIS data to evaluate the impact of labor market size on worker circulation. Following the literature showing that human capital is more occupation-than industry-specific, I measure labor market size by the log of the number of firms offering jobs within an occupation-region cell. I find that a one standard deviation increase in cell size is associated with a 7.8 percentage point increase in the probability that workers change jobs at least once within a cell, and a 7.6 percentage point increase in the probability that workers who change jobs do so more than once. In Chapter 2, we document empirical statistics for internal worker job movements within the firm in addition to their external movements between firms using Brazilian RAIS data. We also better distinguish between voluntary and involuntary job separations by utilizing RAIS reporting of cause of separation and length of nonemployment between jobs. Including internal worker movements increases total job separations in the data by 47%, voluntary job separations by 40%, and involuntary job separations by 50%. We find that wage gains are comparable when workers do on-the-job search, transferring internally versus quitting a job and switching externally. The wage losses when workers are fired and return either to the same firm or move to another firm are similarly comparable. We interpret these results as evidence that external and internal labor markets are integrated. In Chapter 3, we consider founders of limited liability firms who previously held jobs in the formal sector of Brazil. Managers account for four percent of former job holders but nearly one quarter of new firm employment at startup. Little of their overrepresentation as founders or the larger size of their startups is explained by their previous wages or other standard human capital variables. Among non-managerial former occupations, we examined those clearly connected to the demand side (sales) and the supply side (technology, purchasing). Only purchasing was comparable to managerial occupations in entrepreneurship and new firm size.

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