Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/84189 
Year of Publication: 
2013
Series/Report no.: 
ifo Working Paper No. 168
Publisher: 
ifo Institute - Leibniz Institute for Economic Research at the University of Munich, Munich
Abstract: 
This paper investigates the effect of co-worker characteristics on wages, measured by the average person effect of coworkers in a wage regression. The effect of interest is identified from within-firm changes in workforce composition, controlling for personeffects, firm effects, and sector-specific time trends. My estimates are based on a linked employer employee dataset for the population of workers and firms of the Italian regionof Veneto for years 1982–2001. I find that a 10 percent increase in the average labour market value of co-workers' skills is associated with a 3.6 percent wage premium. I alsofind that around one fourth of the wage variation previously explained by unobserved firm heterogeneity is actually due to variation in co-worker skills, and that between 10 and 15 percent of the immigrant wage gap can be explained by differences in coworkercharacteristics.
Subjects: 
Spillover effects
linked employer-employee dataset
skill segregation
JEL: 
J31
J79
Document Type: 
Working Paper

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