Job-Hopping in Silicon Valley: Some Evidence Concerning the Micro-Foundations of a High Technology Cluster

30 Pages Posted: 15 Apr 2005

See all articles by Bruce Fallick

Bruce Fallick

Federal Reserve Banks - Federal Reserve Bank of Cleveland

Charles A. Fleischman

Federal Reserve Board - Macroeconomic Analysis Section

James B. Rebitzer

Boston University School of Management; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics; Bard College - The Levy Economics Institute

Multiple version iconThere are 2 versions of this paper

Date Written: October 2005

Abstract

In Silicon Valley's computer cluster, skilled employees are reported to move rapidly between competing firms. If true, this job-hopping facilitates the reallocation of resources towards firms with superior innovations, but it also creates human capital externalities that reduce incentives to invest in new knowledge. Outside of California, employers can use non-compete agreements to reduce mobility costs, but these agreements are unenforceable under California law. Until now, the claim of hyper-mobility of workers in Silicon has not been rigorously investigated. Using new data on labor mobility we find higher rates of job-hopping for college-educated men in Silicon Valley's computer industry than in computer clusters located out of the state. Mobility rates in other California computer clusters are similar to Silicon Valley's, suggesting some role for state laws restricting non-compete agreements. Outside of the computer industry, California's mobility rates are no higher than elsewhere.

Keywords: Silicon Valley, industrial cluster, mobility, non-compete, modularity, innovation

JEL Classification: R12, L63, O3, J63, J48

Suggested Citation

Fallick, Bruce and Fleischman, Charles A. and Rebitzer, James B., Job-Hopping in Silicon Valley: Some Evidence Concerning the Micro-Foundations of a High Technology Cluster (October 2005). ; IZA Discussion Paper No. 1799. Available at SSRN: https://ssrn.com/abstract=688446

Bruce Fallick (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Cleveland ( email )

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Charles A. Fleischman

Federal Reserve Board - Macroeconomic Analysis Section ( email )

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Washington, DC 20551
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James B. Rebitzer

Boston University School of Management ( email )

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617 353 4605 (Phone)

National Bureau of Economic Research (NBER)

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IZA Institute of Labor Economics

P.O. Box 7240
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Germany

Bard College - The Levy Economics Institute

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United States

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