<abstract xmlns="http://www.w3.org/1999/xhtml"><p>We address the presence, magnitude, and composition of wage gains related to former co-workers and discuss the mechanisms that could explain their existence. Using Hungarian linked employer–employee administrative data and proxying actual co-workership with overlapping work histories, we show that the overall wage gain attributable to former co-workers consists of multiple elements: a contact-specific, an individual-specific, a firm-specific and a match-specific component. Former co-workers, besides the direct effect of their presence, may funnel individuals into high-paying firms, enhance the sorting of good quality workers into firms, and may contribute to the creation of better employer–employee matches. By introducing and applying a wage-decomposition technique, we demonstrate that there are non-negligible differences between linked and market hires in all empirically separable wage elements. By focusing on specific scenarios, we provide additional empirical evidence in favor of employee referral and information transmission as the main drivers of co-worker gains.</p></abstract>

We address the presence, magnitude, and composition of wage gains related to former co-workers and discuss the mechanisms that could explain their existence. Using Hungarian linked employer–employee administrative data and proxying actual co-workership with overlapping work histories, we show that the overall wage gain attributable to former co-workers consists of multiple elements: a contact-specific, an individual-specific, a firm-specific and a match-specific component. Former co-workers, besides the direct effect of their presence, may funnel individuals into high-paying firms, enhance the sorting of good quality workers into firms, and may contribute to the creation of better employer–employee matches. By introducing and applying a wage-decomposition technique, we demonstrate that there are non-negligible differences between linked and market hires in all empirically separable wage elements. By focusing on specific scenarios, we provide additional empirical evidence in favor of employee referral and information transmission as the main drivers of co-worker gains.

Decomposition of co-worker wage gains

IZA Journal of Labor Economics

This work is licensed under the Creative Commons Attribution 4.0 International License.

{"article-title":"Decomposition of co-worker wage gains"}

We address the presence, magnitude, and composition of wage gains related to former co-workers and discuss the mechanisms that could explain their existence....

Decomposition of co-worker wage gains

Online veröffentlicht: 30. Nov. 2020

Seitenbereich: -

DOI: https://doi.org/10.2478/izajole-2020-0008

Schlüsselwörter
co-worker network, wage decomposition, employee referral, match quality, information transmission, fixed effects, linked employer–employee data

© 2020 István Boza, Virág Ilyés, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Decomposition of co-worker wage gains

Online veröffentlicht: 30. Nov. 2020

Seitenbereich: -

DOI: https://doi.org/10.2478/izajole-2020-0008

Schlüsselwörterco-worker network, wage decomposition, employee referral, match quality, information transmission, fixed effects, linked employer–employee data

© 2020 István Boza, Virág Ilyés, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Schlüsselwörter
co-worker network, wage decomposition, employee referral, match quality, information transmission, fixed effects, linked employer–employee data