Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/265185 
Authors: 
Year of Publication: 
2021
Series/Report no.: 
Discussion paper No. 147
Publisher: 
Aboa Centre for Economics (ACE), Turku
Abstract: 
An establishment can improve its productivity by hiring workers from more productive establishments. Then, how important is worker reallocation for aggregate productivity growth? To study this question, I develop a general equilibrium model where knowledge transmits as workers reallocate from one job to another. The calibrated model suggests that the knowledge diffusion mechanism increases the aggregate productivity growth by 0.14 percentage points and enhances welfare. Additionally, the mechanism significantly amplifies the adverse effect of firing costs on aggregate outcomes.
Subjects: 
knowledge diffusion
firm dynamics
worker reallocation
economic growth
JEL: 
D24
E23
E24
J62
O33
O47
Document Type: 
Working Paper

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