Learning from Coworkers

58 Pages Posted: 7 Jan 2019

See all articles by Gregor Jarosch

Gregor Jarosch

Princeton University - Department of Economics; National Bureau of Economic Research (NBER)

Ezra Oberfield

Princeton University

Esteban Rossi-Hansberg

Princeton University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: January 2019

Abstract

We investigate learning at the workplace. To do so, we use German administrative data that contain information on the entire workforce of a sample of establishments. We document that having more highly paid coworkers is strongly associated with future wage growth, particularly if those workers earn more. Motivated by this fact, we propose a dynamic theory of a competitive labor market where firms produce using teams of heterogeneous workers that learn from each other. We develop a methodology to structurally estimate knowledge flows using the full-richness of the German employer-employee matched data. The methodology builds on the observation that a competitive labor market prices coworker learning. Our quantitative approach imposes minimal restrictions on firms' production functions, can be implemented on a very short panel, and allows for potentially rich and flexible coworker learning functions. In line with our reduced form results, learning from coworkers is significant, particularly from more knowledgeable coworkers. We show that between 4 and 9% of total worker compensation is in the form of learning and that inequality in total compensation is significantly lower than inequality in wages.

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Suggested Citation

Jarosch, Gregor and Oberfield, Ezra and Rossi-Hansberg, Esteban Alejandro, Learning from Coworkers (January 2019). NBER Working Paper No. w25418, Available at SSRN: https://ssrn.com/abstract=3311388

Gregor Jarosch (Contact Author)

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Ezra Oberfield

Princeton University ( email )

22 Chambers Street
Princeton, NJ 08544-0708
United States

Esteban Alejandro Rossi-Hansberg

Princeton University - Department of Economics ( email )

Princeton, NJ
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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