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Measuring Living Standards with Income or Consumption: A Canadian Perspective
(with Thomas F. Crossley)
Canadian Journal of Economics , 2011, 44(1), pp.88-105
Abstract: Knowledge spillovers through worker mobility between firms, found in previous research, imply that knowledge production within firms creates a positive externality to the hiring firms and their workers. We calculate the shares in the gains from spillovers retained by these parties using matched employer-employee data from Danish manufacturing. We find that around two-thirds of the total output gain (0.1% per year) is netted by the firms as extra profit, about a quarter goes to the incumbent workers as extra wages, while the workers who bring spillovers receive no more than 8% of it. This gains distribution, which favors the hiring firms, is similar for different types of moving workers, and is stable over time.
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