Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/267454 
Year of Publication: 
2022
Series/Report no.: 
IZA Discussion Papers No. 15717
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We estimate how exogenous worker exits affect firms' demand for incumbent workers and new hires. Drawing on administrative data from Germany, we analyze 34,000 unexpected worker deaths, which, on average, raise the remaining workers' wages and retention probabilities. The average effect masks substantial heterogeneity: Coworkers in the same occupation as the deceased see positive wage effects; coworkers in other occupations experience wage decreases when a high-skilled or specialized worker dies. Our findings imply substantial replacement costs, which are larger in thin markets and when skills are specialized.
Subjects: 
hiring costs
human capital specificity
labor market thickness
JEL: 
J20
J30
J63
Document Type: 
Working Paper

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