Productivity Growth and Workers’ Job Transitions: Evidence from Censal Microdata

32 Pages Posted: 12 Apr 2021 Last revised: 21 Apr 2022

See all articles by Elias Albagli

Elias Albagli

University of Southern California - Marshall School of Business; Central Bank of Chile

Mario Canales

Central Bank of Chile

Chad Syverson

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Matias Tapia

Pontificia Universidad Catolica de Chile

Juan Wlasiuk

Central Bank of Chile

Multiple version iconThere are 2 versions of this paper

Date Written: April 2021

Abstract

A large body of work has highlighted the importance of employment reallocation as a driver of aggregate productivity growth, but there is little direct evidence on the extent of this process at the firm-worker level. We use an administrative matched employer-employee census for Chile to provide novel insights into the relationship between job transitions and productivity variation across firms, and to quantify the contribution of different worker groups to aggregate reallocation. As many theories would predict, worker flows from lower- to higher-productivity firms are larger than those of the opposite sign. Empirically, however, this is only marginally so. Almost half of all transitions occur “down the firm productivity ladder.” This process is also highly heterogeneous along several dimensions. Up-the-ladder flows are more likely for direct job-to-job transitions than those that pass through non-employment, and among firms in the upper end of the productivity distribution. They are also much more likely for young, high-skilled workers, whose job transitions comprise in an accounting sense the lion’s share of aggregate productivity change. Interestingly, workers with the highest job turnover rates contribute proportionally the least to aggregate productivity changes. Aggregate reallocation gains are therefore mostly explained by a relatively narrow subset of job transitions. Put together, this evidence implies that the productivity mechanics of job reallocation yield a net benefit, but this hides massive and heterogeneous gross flows underneath.

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Suggested Citation

Albagli, Elias and Canales, Mario and Syverson, Chad and Tapia, Matias and Wlasiuk, Juan, Productivity Growth and Workers’ Job Transitions: Evidence from Censal Microdata (April 2021). NBER Working Paper No. w28657, Available at SSRN: https://ssrn.com/abstract=3824533

Elias Albagli (Contact Author)

University of Southern California - Marshall School of Business ( email )

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HOME PAGE: http://www.marshall.usc.edu/faculty/directory/albagli

Central Bank of Chile ( email )

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Mario Canales

Central Bank of Chile

Chad Syverson

University of Chicago - Booth School of Business ( email )

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National Bureau of Economic Research (NBER)

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Matias Tapia

Pontificia Universidad Catolica de Chile

Juan Wlasiuk

Central Bank of Chile

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