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Learning from Coworkers

Author

Listed:
  • Gregor Jarosch

    (Princeton University)

  • Esteban Rossi-Hansberg

    (Princeton University)

  • Ezra Oberfield

    (Princeton University)

Abstract
We investigate learning at the workplace. We are interested in understanding how individuals learn from coworkers with different levels of knowledge and the implications of this form of learning for individual and aggregate outcomes. To do so, we start by analyzing the empirical relationship between the wage growth of an individual and the wages of her coworkers. To discipline the key features of this relationship we use German administrative data that contain the employment biographies of the entire workforce of the establishments in the sample. We use a variety of empirical specifications that allow us to understand which features of the distribution of wages are related to an individual's wage growth. Our findings indicate that more highly paid coworkers substantially increase future wage growth. Furthermore, the transmission depends on particular features of the wage distribution. The data suggest little congestion from less well paid workers and a roughly symmetric positive spillovers from those higher up in the wage distribution. We also show that the effects we find are present across the wage distribution. Although suggestive of significant learning from coworkers, these findings could in principle also be consistent with other features of wage setting mechanisms in the labor market. To address these possibilities we offer a battery of checks which suggest that these findings do not purely reflect mean reversion, backloading, or other firm-specific factors by separately analyzing switchers and stayers, plant closings, using information about worker tenure, and studying the nonlinearities in the empirical relationship between wage growth and the distribution of coworkers. Guided by this evidence we develop a simple competitive model of the labor market in which coworkers learn from each other. The model has the key feature that a worker's pay reflects both her knowledge and a compensating differential for the opportunity to learn from her coworkers. In contrast, the labor market compensates those who provide their coworkers with learning opportunities. Our model yields a mapping between the reduced-form evidence on wages and the underlying knowledge and learning of individuals. Hence, we structurally estimate a parametric version of our model using a simple learning function that can account for the most important reduced form patterns we document. We offer a way to estimate the parameters of this function using the matched employer-employee information for the German labor market. The result is a structurally estimated `learning function' that maps an agent's learning to the knowledge distribution of her coworkers. Our estimated model can be used to study a variety of phenomena that might affect team composition and therefore individual learning. We plan to study how changes in the organization of work brought about by technological change affect earnings inequality, life cycle wage profiles, and the aggregate rate of growth.

Suggested Citation

  • Gregor Jarosch & Esteban Rossi-Hansberg & Ezra Oberfield, 2018. "Learning from Coworkers," 2018 Meeting Papers 838, Society for Economic Dynamics.
    • Handle: RePEc:red:sed018:838
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    References listed on IDEAS

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    2. Nix, Emily, 2020. "A researcher’s guide to the Swedish compulsory school reform," Working Paper Series 2020:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    3. Behrens, Kristian & Kichko, Sergei & Thisse, Jacques-Francois, 2024. "Working from home: Too much of a good thing?," Regional Science and Urban Economics, Elsevier, vol. 105(C).
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    6. Arellano-Bover, Jaime & Saltiel, Fernando, 2021. "Differences in On-the-Job Learning across Firms," IZA Discussion Papers 14473, Institute of Labor Economics (IZA).
    7. Huneeus, Federico & Larrain, Borja & Larrain, Mauricio & Prem, Mounu, 2021. "The internal labor markets of business groups," Journal of Corporate Finance, Elsevier, vol. 69(C).
    8. Carolin Linckh & Samuel Muehlemann & Harald Pfeifer, 2024. "Beggars cannot be choosers: The effect of labor market tightness on hiring standards, wages, and hiring costs," Economics of Education Working Paper Series 0217, University of Zurich, Department of Business Administration (IBW).
    9. Jaime Arellano-Bover, 2024. "Career Consequences of Firm Heterogeneity for Young Workers: First Job and Firm Size," Journal of Labor Economics, University of Chicago Press, vol. 42(2), pages 549-589.
    10. Benjamin Lochner & Bastian Schulz, 2024. "Firm Productivity, Wages, and Sorting," Journal of Labor Economics, University of Chicago Press, vol. 42(1), pages 85-119.
    11. Granaglia, Elena, 2019. "Can market inequalities be justified? The intrinsic shortcomings of meritocracy," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 284-290.
    12. Garcia-Louzao, Jose & Hospido, Laura & Ruggieri, Alessandro, 2023. "Dual returns to experience," Labour Economics, Elsevier, vol. 80(C).
    13. Julien Sauvagnat & Fabiano Schivardi, 2024. "Are Executives in Short Supply? Evidence from Death Events," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 91(1), pages 519-559.
    14. Victoria Gregory, 2020. "Firms as Learning Environments: Implications for Earnings Dynamics and Job Search," Working Papers 2020-036, Federal Reserve Bank of St. Louis, revised Sep 2023.
    15. Liu, Sitian & Su, Yichen, 2022. "The Effect of Working from Home on the Agglomeration Economies of Cities: Evidence from Advertised Wages," MPRA Paper 113108, University Library of Munich, Germany.
    16. Enzo Brox & Michael Lechner, 2024. "Teamwork and Spillover Effects in Performance Evaluations," Papers 2403.15200, arXiv.org.
    17. Rezaei, Sarah & Rosenkranz, Stephanie & Weitzel, Utz & Westbrock, Bastian, 2024. "Social preferences on networks," Journal of Public Economics, Elsevier, vol. 234(C).
    18. Adam Feher, 2024. "Guarding Expertise and Assets: Non-competition Agreements and Their Implications," IAAEU Discussion Papers 202404, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    19. Davide Dottori & Francesca Modena & Giulia Martina Tanzi, 2023. "Measuring peer effects in parental leaves: evidence from a reform," Temi di discussione (Economic working papers) 1399, Bank of Italy, Economic Research and International Relations Area.
    20. Chesney, Alexander J., 2022. "Should I get a master’s degree?," Economics of Education Review, Elsevier, vol. 91(C).
    21. Moscelli, Giuseppe & Sayli, Melisa & Mello, Marco, 2022. "Staff Engagement, Coworkers' Complementarity and Employee Retention: Evidence from English NHS Hospitals," IZA Discussion Papers 15638, Institute of Labor Economics (IZA).

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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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