Human Capital Portability and Worker Career Choices: Evidence from M&A Bankers

66 Pages Posted: 23 Nov 2020 Last revised: 15 Nov 2022

See all articles by Janet Gao

Janet Gao

McDonough School of Business

Wenyu Wang

Indiana University - Kelley School of Business - Department of Finance

Yufeng Wu

Ohio State University (OSU)

Date Written: October 1, 2021

Abstract

How does firm-specific human capital shape workers’ career trajectories? We develop a model where workers accumulate both portable and non-portable (firm-specific) human capital and learn about their match quality with employers gradually. The model is estimated using granular data on M&A bankers in bulge bracket and boutique firms. We show that a large fraction of bankers’ human capital is non-portable, ranging from 12% to 44% across firms. Bankers make dynamic tradeoff between portability and returns on human capital, leading to time-varying job preferences over their life cycle. Our results have implications for high-skill workers in human capital-intensive industries in general.

Keywords: labor mobility, human capital portability, career path, M&A advisor

JEL Classification: C51, G24, J60, L22

Suggested Citation

Gao, Janet and Wang, Wenyu and Wu, Yufeng, Human Capital Portability and Worker Career Choices: Evidence from M&A Bankers (October 1, 2021). Available at SSRN: https://ssrn.com/abstract=3724657 or http://dx.doi.org/10.2139/ssrn.3724657

Janet Gao

McDonough School of Business ( email )

Washington, DC 20057
United States

Wenyu Wang (Contact Author)

Indiana University - Kelley School of Business - Department of Finance ( email )

1309 E. 10th St.
Bloomington, IN 47405
United States

Yufeng Wu

Ohio State University (OSU) ( email )

812 Fisher Hall
2100 Neil Ave
Columbus, OH 43210
United States
43210 (Fax)

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