Employee-Owned Firms and the Careers of Young Workers *

53 Pages Posted: 20 Jan 2023

See all articles by Gabriel Burdin

Gabriel Burdin

University of Leeds - Faculty of Business; IZA Institute of Labor Economics

Jose Garcia-Louzao

Bank of Lithuania; Vilnius University; CESifo (Center for Economic Studies and Ifo Institute)

Multiple version iconThere are 2 versions of this paper

Date Written: January 17, 2023

Abstract

Using detailed administrative data from Spain, we characterize how a first work experience in an employee-owned firm (EOF) versus a conventional firm can affect workers' careers. We find that workers' exposure to EOFs at the time of entry reduces daily wages by 8-14% over the first 15 years in the labor market. The wage penalty appears to be driven by differences in job mobility and wage returns to experience rather than by non-random selection. We show that workers who had their first job in EOFs have a strong attachment to this organizational model and are less likely to experience both voluntary and involuntary job separations over their careers. In addition, we quantify lower wage returns to experience in EOFs, although there are no differences in subsequent career progression in terms of promotions. Taken together, the analysis suggests the existence of other job attributes offered by EOFs that may compensate for flatter wage profiles.

Keywords: Employee-Owned Firms, Careers, Wages, Job Mobility J31, J50, J62

JEL Classification: J31, J50, J62

Suggested Citation

Burdin, Gabriel and Garcia-Louzao, Jose, Employee-Owned Firms and the Careers of Young Workers * (January 17, 2023). Available at SSRN: https://ssrn.com/abstract=4327016 or http://dx.doi.org/10.2139/ssrn.4327016

Gabriel Burdin

University of Leeds - Faculty of Business ( email )

Leeds LS2 9JT
United Kingdom

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Jose Garcia-Louzao (Contact Author)

Bank of Lithuania ( email )

Totoriu 4
Vilnius, LT-01121
Lithuania

Vilnius University ( email )

Sauletekio ave. 11, Vilnius
Vilnius
Lithuania

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

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