Employment in Low-wage Firms: The Scarring Effect on Career Development

As part of the Vilfredo Pareto Research Seminar series, the International Economics Department at the Geneva Graduate Institute is pleased to invite you to a public talk given by Annaïg Morin.

Abstract:

Job poaching often occurs when workers climb the firm productivity ladder. In this paper, I first investigate the extent to which the type of the poached firm impacts the hiring wage received by job movers in their destination firms. I find that workers transitioning out of low-wage firms earn 4.5% less than workers transitioning out of median-wage firms, and this wage penalty increases with the wage-type of the destination firm. I interpret this result as a strong evidence in support of wage bargaining mechanisms, particularly in high-wage firms. Second, I show that the origin firm effect is highly persistent and influences the worker's career up to thirteen years after the worker's separation from the origin firm. To explain this persistence, I measure the effect of the origin firm type on various labor market outcomes, such as hourly wages, the probability of unemployment, tenure, the probability of further job switches, over the thirteen years following the job change.