Essays in Labor Economics

Abstract

This dissertation addresses questions in the labor market with a focus on firms. In the first chapter, I examine different learning opportunities across firms by distinguishing learning from coworkers and firms. The second chapter studies firm organizational spillovers. In the third chapter, I investigate how exporting affects firms' hiring decisions in the entry-level labor market. Chapter 1: This chapter examines and separately identifies two types of learning at the workplace: learning from coworkers and learning from firms. I consider a structural model of idea flows in a competitive market where workers' compensation consists of learning, amenities, and wages. Workers accumulate human capital by interacting with their coworkers and directly from their firm. Using German employee-employer matched data, I exploit a clustering method to classify firms into learning and amenity groups. Then I allow learning functions to differ across groups and separately estimate firm learning and coworker learning parameters. Amenity value is estimated from switchers by relying on features of the model. I find that both types of learning are significant, consistent with previous studies examining each learning type separately. There is significant heterogeneity across firms of different types: some firms provide workers with more firm learning, while in others, workers' learning mostly comes from their coworkers. The relationship between two non-wage compensation also varies across workers. I explore the implication of the findings for inequality. Chapter 2: In this chapter, Div Bhagia and I study whether the organizational decisions of new entrants in a market are influenced by the hierarchical structure of their incumbent peers. Using matched employer-employee data from Brazil, we classify establishments into one to four-layer entities and examine how a new entrant’s decision to add an organizational layer varies with the average number of layers of other establishments in their industry and location. To address the potential endogeneity of peers’ layers, we construct an instrument based on layers of other establishments in peers’ firms that operate in different markets. We find that new entrants are twice as likely to add a layer within five years if their average peer has one more layer at the time of entry. Our results suggest that organizational structure spillovers can provide a new source of agglomeration advantages. We also find that the influence of peers is stronger in more similar industries. Additionally, we show that new entrants with high-layer peers hire more workers from within the market in the newly created layers, indicating personnel exchanges as a mechanism for organizational spillovers. Chapter 3: I investigate the impact of exporting on hiring decisions in the entry-level labor market. Firms face higher opportunity costs of foregone output when they hire inexperienced workers, who require more training than experienced workers. Using Korean establishment-level data, where I distinctively observe experienced and inexperienced new hires, I show that exporting firms hire fewer inexperienced workers but more experienced workers than non-exporting firms. Moreover, foreign market opportunities further induce exporters to favor experienced workers. This finding suggests that high export opportunities, which increase the opportunity costs of training, may increase barriers to better jobs in the entry-level labor market for young workers.