Essays on Productivity Growth from New Workers

Chapter 1: This paper develops an endogenous growth model in which the job-to-job transition of workers provides a channel for the spillover of knowledge between firms. Workers learn some of the productive knowledge used by their employer while working on the job. When a worker moves to another firm, they are able to adapt some of this knowledge for use at the hiring firm. Firms endogenously control their exposure to new knowledge by choosing the intensity that they post vacancies in a search-and-matching labor market. It is shown that under a set of assumptions regarding the initial distribution of firm types and the vacancy posting cost function, the competitive equilibrium leads to a balanced growth path that has a constant growth rate and stationary distribution of firm size. Chapter 2: Using linked employer-employee data from New Zealand, a firm's productivity growth is related to the firm's exposure to outside knowledge through the hiring of new workers with previous experience at other firms. The estimated relationship between productivity growth and hiring patterns is compared to the predictions implied by both the worker quality and knowledge spillover channels. While not a causal relationship, the multi-factor productivity results are consistent with the productivity of a worker's previous employer acting as a signal of the unmeasured quality/inherent-knowledge of the new worker. When firm productivity is measured in terms of labor productivity, the results are also consistent with new workers spilling over knowledge that allows the hiring firm to adopt more capital intensive production techniques when the new worker was previously employed by a more productive firm.