The Workforce of Pioneer Plants

43 Pages Posted: 22 May 2016

See all articles by Ricardo Hausmann

Ricardo Hausmann

Harvard University - Harvard Kennedy School (HKS)

Frank Neffke

Harvard University - Harvard Kennedy School (HKS)

Date Written: January 28, 2016

Abstract

Is labor mobility important in technological diffusion? We address this question by asking how plants assemble their workforce if they are industry pioneers in a location. By definition, these plants cannot hire local workers with industry experience. Using German social-security data, we find that such plants recruit workers from related industries from more distant regions and local workers from less-related industries. We also show that pioneers leverage a low-cost advantage in unskilled labor to compete with plants that are located in areas where the industry is more prevalent. Finally, whereas research on German reunification has often focused on the effects of east-west migration, we show that the opposite migration facilitated the industrial diversification of eastern Germany by giving access to experienced workers from western Germany.

Keywords: Diversification, technological diffusion, local labor markets, industry-specific human capital, mobility, clusters, Germany

JEL Classification: O33, R11, R12, O15, M13, M50, J23, J24

Suggested Citation

Hausmann, Ricardo and Neffke, Frank, The Workforce of Pioneer Plants (January 28, 2016). HKS Working Paper No. 16-006. Available at SSRN: https://ssrn.com/abstract=2782643 or http://dx.doi.org/10.2139/ssrn.2782643

Ricardo Hausmann (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Mailbox 34
Cambridge, MA 02138
United States
617-496-3740 (Phone)
617-496-8753 (Fax)

HOME PAGE: http://www.hks.harvard.edu/about/faculty-staff-directory/ricardo-hausmann

Frank Neffke

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

HOME PAGE: http://www.frankneffke.com

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