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Differences in On-the-Job Learning across Firms

Author

Listed:
  • Arellano-Bover, Jaime

    (Tor Vergata University of Rome, Einaudi Institute for Economics and Finance (EIEF), and IZA)

  • Saltiel, Fernando

    (McGill University and IZA)

Abstract
We present evidence consistent with large disparities across firms in the on-the-job learning their young employees experience, using administrative datasets from Brazil and Italy. We categorize firms into discrete classes—which our conceptual framework interprets as skill-learning classes—using a clustering methodology that groups together firms with similar distributions of unexplained wage growth. Mincerian returns to experience vary widely across experiences acquired in different firm classes. Moreover, past experiences at firms with better on-the-job learning lead to subsequent jobs featuring greater non-routine task content. Three empirical tests leveraging firm stayers and movers, hiring wages, and displaced workers point towards a portable and general human capital interpretation. Heterogeneous employment experiences explain an important share of wage variance by age 35, thus contributing to shape wage inequality. Lastly, we show that firms’ observable attributes only mildly predict on-the job learning opportunities.

Suggested Citation

  • Arellano-Bover, Jaime & Saltiel, Fernando, 2023. "Differences in On-the-Job Learning across Firms," CAGE Online Working Paper Series 670, Competitive Advantage in the Global Economy (CAGE).
  • Handle: RePEc:cge:wacage:670
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    1. Di Addario, Sabrina & Kline, Patrick & Saggio, Raffaele & Sølvsten, Mikkel, 2023. "It ain’t where you’re from, it’s where you’re at: Hiring origins, firm heterogeneity, and wages," Journal of Econometrics, Elsevier, vol. 233(2), pages 340-374.
    2. Ostrizek, Franz & Sartori, Elia, 2023. "Screening while controlling an externality," Games and Economic Behavior, Elsevier, vol. 139(C), pages 26-55.
    3. Burdin, Gabriel & Garcia-Louzao, Jose, 2023. "Employee-Owned Firms and the Careers of Young Workers," IZA Discussion Papers 15880, Institute of Labor Economics (IZA).
    4. Pedro Portugal & John T. Addison, 2022. "Retrieving the Returns to Experience, Tenure, and Job Mobility from Work Histories," Working Papers w202221, Banco de Portugal, Economics and Research Department.
    5. Arellano-Bover, Jaime & San, Shmuel, 2023. "The Role of Firms and Job Mobility in the Assimilation of Immigrants: Former Soviet Union Jews in Israel 1990–2019," IZA Discussion Papers 16389, Institute of Labor Economics (IZA).
    6. Garcia-Louzao, Jose & Hospido, Laura & Ruggieri, Alessandro, 2023. "Dual returns to experience," Labour Economics, Elsevier, vol. 80(C).
    7. Ma, Xiao & Muendler, Marc-Andreas & Nakab, Alejandro, 2020. "Learning by Exporting and Wage Profiles: New Evidence from Brazil," MPRA Paper 109497, University Library of Munich, Germany, revised 31 Aug 2021.

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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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