Productivity Gains from Worker Mobility and their Distribution between Workers and Firms

Using data from the universe of Danish manufacturing firms and workers over the period 1995-2007, we estimate output gains linked to productivity spillovers through worker mobility, and calculate the shares in these gains accrued to firms, to the workers who bring spillovers, and to the rest of the workers. Applying our results to the manufacturing sector as a whole, the total output gains average at 0.16% per year, of which 80% is retained by the firms, 15% by the rest of the workers, and only 5% goes to the workers who bring spillovers. We therefore conclude that output gains through worker mobility are largely a positive externality for hiring firms.