Polarizing Corporations: Does Talent Flow to “Good” Firms?

70 Pages Posted: 28 Nov 2023 Last revised: 14 Mar 2024

See all articles by Emanuele Colonnelli

Emanuele Colonnelli

University of Chicago - Booth School of Business

Timothy McQuade

University of California, Berkeley

Gabriel Ramos

Imperial College Business School

Thomas Rauter

University of Chicago - Booth School of Business

Olivia Xiong

University of Chicago Booth School of Business

Date Written: March 11, 2024

Abstract

We conduct a field experiment in partnership with the largest job plat-form in Brazil to study how environmental, social, and governance (ESG) practices of firms affect talent allocation. We find both an average job-seeker’s preference for ESG and a large degree of heterogeneity across socioeconomic groups, with the strongest preference displayed by highly educated, white, and politically liberal individuals. We combine our experimental estimates with administrative matched employer-employee microdata and estimate an equilibrium model of the labor market. Counterfactual analyses suggest ESG practices increase total economic output and worker welfare, while increasing the wage gap between skilled and unskilled workers.

Suggested Citation

Colonnelli, Emanuele and McQuade, Timothy and Ramos, Gabriel and Rauter, Thomas and Xiong, Olivia, Polarizing Corporations: Does Talent Flow to “Good” Firms? (March 11, 2024). University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2023-147, Available at SSRN: https://ssrn.com/abstract=4645695 or http://dx.doi.org/10.2139/ssrn.4645695

Emanuele Colonnelli (Contact Author)

University of Chicago - Booth School of Business ( email )

HOME PAGE: http://emanuelecolonnelli.com

Timothy McQuade

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

Gabriel Ramos

Imperial College Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

Thomas Rauter

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Olivia Xiong

University of Chicago Booth School of Business ( email )

Chicago
United States

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