Research

Research Summary

Job Market Paper

Worker Circulation and Labor Market Size: Evidence From Brazil (PDF)

One of the benefits of agglomeration is better matching between workers and firms. However, the role in the matching process of worker circulation among firms remains unclear. Having more firms facilitates movement from firm to firm in search of the best match but a worker entering a larger labor market can find a better match with his first job and thus has less need to change jobs. To evaluate the impact of labor market size on worker circulation I use the Brazilian matched firm-worker data set RAIS for the period 2002-2014. Following the literature showing that human capital is more occupation- than industry-specific, I measure labor market size by the log of the number of firms offering jobs within an occupation-region cell at the midpoint of the time period. Using region fixed effects to control for overall labor market characteristics such as population density, I find that a one standard deviation increase in cell size is associated with a 7.8 percentage point increase in the probability that workers change jobs at least once within a cell, and a 7.6 percentage point increase in the probability that workers who change jobs do so more than once. I interpret my results using a model of the impact of agglomeration on worker circulation within skill groups, with worker preferences among different firms located in characteristics space. The theoretical results strongly imply that worker circulation increases with firm density.

Research in Progress

Climbing the Wage Ladder Through External and Internal Mobility: Evidence from Brazil

Unemployment Hazard Rates and Labor Market Size