Economics and Business Economics Seminar (ECO): Francesco Del Prato, Paris School of Economics
Title: "The Importance of Working for Earnest" - Climbing the Job Ladder through Firms’ Connectivity
Info about event
Time
Location
Fuglesangs Allé 4, 8210 Aarhus V, building 2632(L), room 242
Presenter: Francesco Del Prato, Paris School of Economics
Fields: Macro/Labor Economics
Seminar title: "The Importance of Working for Earnest” - Climbing the Job Ladder through Firms’ Connectivity
Host: Rune Majlund Vejlin
Abstract:
Do workers consider the “springboard” value of a firm, in terms of future job opportunities, when choosing an employer? Using a search model of the labor market, I introduce the idea that firms differ in enhancing their employees’ chances of receiving external job offers. The model informs a firm-level proxy for outside job offers received by workers. This measure empirically aligns with key model predictions: 1) it negatively correlates with both firm-specific tenure and young workers’ entry salaries, revealing a compensating differential; and 2) it suggests that workers enjoy a salary premium upon leaving such firms, indicative of faster career progression. The model is estimated on administrative data from Italy and successfully captures key aspects of labor market dynamics. My channel explains 10% of the overall job-to-job transitions and shows how the firm-induced variation in job search can be a significant driver of inequality, especially at the bottom of the wage distribution.