Effect Of Labor Mobility Research Articles

The effect of labor mobility on corporate investment and performance over the business cycle

We show that time-series variation in investment opportunities and labor demand create heterogeneity in the effects of labor mobility on corporate investment over the business cycle. To isolate variation in labor mobility, we create an annual state-level index from 1984 through 2017 that captures the degree to which state courts enforce covenants not to compete. We find that firms located in more mobile labor markets increase investment rates more during economic expansions but have similar investment rates during periods of low or negative growth. This increased investment during expansions is greater for firms that rely more on recruiting skilled and experienced workers to grow their businesses, and it translates into higher sales growth rates, profits, and valuations. Overall, our results suggest that the benefits of being able to recruit qualified workers with relevant experience during expansions outweigh the costs associated with losing key workers.

Labor mobility and the cost of debt

This paper empirically shows that the cost of debt financing is systematically higher for firms that operate in mobile labor markets. We posit two channels through which labor mobility could affect firms’ cost of debt: 1. higher default risk, due to an increase in cash flow volatility arising from the potential loss of valuable human capital assets, and 2. less pledgeable assets, given that a firm has limited control and ownership over the firm’s human capital. Using across U.S. state variations in the enforceability of non-compete agreements that restrict employee job switches as a proxy for anticipated labor mobility, and state-level reforms to non-compete laws to capture exogenous shocks to labor mobility, we find that labor mobility has a significantly positive relation with the credit spreads of U.S. corporate debt issued from 1990–2014. Moreover, our analysis reveals that the effect of labor mobility is greater for firms that are more reliant on human capital – i.e., high R&D firms and firms with greater organizational capital – which corroborates the main results. Overall, these findings suggest that investors price financial contracts by taking into account the risk that arises from labor mobility.

Growing Pains: The Effect of Labor Mobility on Corporate Investment over the Business Cycle

Procyclical investment opportunities and labor demand create time series-variation in the importance of labor mobility for corporate investment. Firms located in more mobile labor markets, captured by variation in state courts’ enforcement of covenants not to compete, increase investment rates more during economic expansions. This effect is stronger for younger firms and those with fewer employees that rely more on recruiting skilled and experienced workers to grow. This increased investment is also associated with higher sales growth rates, profits, and valuations. Overall, our results suggest that greater labor mobility reduces an important friction that constrains investment during economic expansions.

Do Employees Matter for Firms’ Tax Planning Decisions? Evidence from Labor Mobility.

We examine the impact of employee incentives on firms’ tax planning. Labor mobility refers to the flexibility of workers to find alternative employment. Higher labor mobility increases expected labor adjustment costs for firms and increases employees’ bargaining power. Therefore, firms have strong incentives to make decisions in line with employees’ preferences when labor mobility is high. Using a sample of U.S. firms from 1993-2015, we find evidence that higher labor mobility is positively associated with cash effective tax rates and negatively associated with the volatility of cash effective tax rates. Results imply that firms engage in less tax avoidance when labor mobility is higher. We find stronger results for less unionized industries and environments with lower employment security. We provide evidence of a causal effect of labor mobility on tax planning by exploiting changes in state real estate transfer taxes.

The Effect of Labor Mobility on the Urban-Rural Income Gap—Based on 272 Prefecture-Level City Panel Data in China

The current income gap situation between urban and rural areas is still one of the important problems on the road of China’s economic development; based on the panel data of 272 prefecture-level cities in China from 2003 to 2012 and the theory of labor mobility, this paper uses the quantile regression and OLS regression to study the relationship between labor mobility and urban-rural income gap. The empirical results show that: labor mobility can effectively narrow the income gap between urban and rural areas, and with the increase in the number of quantile points, this reduction effect increases. The impact of industrial structure and industrialization level has changed at different quantile points, but the investment in science and education, the scale of financial development, and the impact of social security have not changed.

Mobility and Entrepreneurship: Evaluating the Scope of Knowledge–Based Theories of Entrepreneurship

Knowledge–based theories of entrepreneurship infer transfer of knowledge from the effect of labor mobility on entrepreneurial entry. Yet, simple selection or situational mechanisms that do not imply knowledge transfer may influence entrepreneurial entry in similar ways. We argue that the extent to which such alternative mechanisms operate, labor mobility predicts entry but not subsequent performance for entrepreneurs. Analyses of matched employee–employer data from Sweden suggest that high rates of geographical and industry mobility increase individuals’ likelihood of entrepreneurial entry but have no effects on their entrepreneurial performance. This indicates that the relationship between labor mobility and entrepreneurial entry do not necessarily imply knowledge transfer.

Does the mobility of R&D labor increase innovation?

We investigate the effect of mobility of R&D workers on the total patenting activity of their employers. Our study documents how mobile workers affect the patenting activity of the firm they join and the firm they leave. The effect of labor mobility is strongest if workers join from patent-active firms. We also find evidence of a positive feedback effect on the former employer's patenting from workers who have left for another patent-active firm. Summing up the effects of joining and leaving workers, we show that labor mobility increases the total innovative activity of the new and the old employer. Our study which is based on the population of R&D active Danish firms observed between 1999 and 2004 thus provides firm-level support for the notion that labor mobility stimulates overall innovation of a country or region due to knowledge transfer.

Effects of Labour Mobility: An Analysis of Recent International Development Literature

Successive censuses have shown that the Aboriginal populations of Canada are very mobile with strong tendencies to move to urban areas, but little is known about the consequences of these circular movements on the development of First Nations, the welfare of individual members and their families, and the costs and benefits to their larger communities. This article reviews the large body of literature on the nexus between mobility and development of countries in the developing world with a view to developing insights that may be relevant to the development of First Nation communities. While there are clear differences, the two contexts may be similar enough – in terms of socio-economic well-being, service levels, and institutional barriers to socio-economic development – for such analysis to contribute to understanding the effects of migration on the migrants themselves, their households, and their communities and countries of origin. The experience of developing countries suggest that there are positive gains not only in earnings but also in education and health for those who move internally and more so for those able to move internationally, even if there remain some concerns about negative effects on migrants’ families left behind, especially on the children. What seems clear is that migration plays an important role in family survival strategies. Money migrants send home finance the education of children, enable better health care, and improve housing. They shield migrants’ families against all kinds of “shocks”. However, emigration may reduce the human capital stock (brain drain), thus adversely affecting productivity. The loss of health professionals can set back critical medical services in remote communities, and disrupt formal and informal systems for transferring know-how. These “spill-over effects” or externalities on origin communities can be significant, imposing burdens on those left behind. Finally, the article looks at how diaspora communities have served as sources of information, linkages, or networks with businesses, markets for sovereign bonds, mediums for the transfer of technology and know-how, and a market for tourism.

When Assets Go Home at Night: The Effect of Labor Mobility on Firms’ Financial Decisions

When Assets Go Home at Night: The Effect of Labor Mobility on Firms’ Financial Decisions

Organizational Memory: From Expectations Memory to Procedural Memory

Organizational memory is not just the stock of knowledge about how to do things, but also of expectations of organizational members vis‐à‐vis each other and the organization as a whole. The central argument of this paper is that this second type of organizational memory –organizational expectations memory– is a necessary precondition for successfully creating and maintaining organizational procedural memory, which is at the basis of organizational performance. If members of organizations have fewer expectations of being rewarded beyond what is stipulated in formal contracts, these individuals are less likely to risk investing in collective tacit and firm‐specific knowledge resources and more likely to focus on building individual and mobile knowledge resources that have value outside the boundaries of the organization. A case study of latent organizations in the Dutch film industry is presented to support the central argument and suggests further avenues of research, in particular concerning the effects of labour mobility on organizational expectations memory.

Reasons and Effects of the Romanian Labour Force Migration in European Union Countries

In the European Union countries and neighboring regions, the expansion will produce a redistribution of the labour force between industries and countries. After the Romania’s adhesion to the European Union, the need for an increased productivity, the lack of capital, the competition on the EU market and the low wages have concurred to the intensification of the migration process of the labour force, especially to the West European countries. As example, from over two millions of Romanians working abroad (almost 10 % from total population), 40% have chosen to work in Italy, 18% in Spain, 5% in Germany. In this context, the questions that appear refer to the following issues: Does a real possibility exist for the emigrants to join the active population of the destination country and being employed according to their competences? How many Romanians citizens continue to stay in a foreign country if their job is not proper with their professional skills? Which countries in European Union apply discriminations on its labour market? Do European Countries usually admit Romanian employees temporarily and expect them to leave in short time if they can’t find a proper job? Which are the socio-economic effects of labour mobility on the Common Market of EU? Which are the forecasts concerning the labour mobility in the next years? In our paper, we try to answer these questions and we also intend to make a comparative analysis concerning - what we consider - some of the most important challenges occurred in Romania’s economy in the context of the mentioned migration process: the adoption of an economic growth model based on the increase of the employed population, the diminution of the discrepancies between our country labour market and the EU target established through Lisbon Strategy, the creation of a new structure of occupation with support in productivity growth and labour price.

International migration in an equilibrium matching model

This paper considers the effects of labor mobility in a specific factors model when unemployment arises for matching-theoretic reasons. Immigration raises the welfare of domestic workers even though the increasing labor supply decreases wages if firms create more jobs in response to inflows of immigrants. The determinants of the patterns of labor movements are considered in a two-country model. Unemployed workers decide whether to leave their country not only on the basis of the wage differential, but also in response to the difference in unemployment rates between the two countries. The two countries can diverge in equilibrium in the sense that one country exhibits a high wage but a high unemployment rate whereas the other exhibits a low wage but a low unemployment rate. It is possible to see movements of workers from a high-wage country to a low-wage country if the unemployment rate is higher in the former than in latter and wages are not high enough to compensate for the high level of unemployment in the high-wage country.

Functional Specialization, Alienation, and Job Satisfaction

Provides information on factors affecting the social and psychological conditions of workers. Discussion of functional specialization; Assessment of work attitudes and job satisfaction; Effect of labor mobility on working environment. (Abstract copyright EBSCO.)

Discussion: Aggregate Demand Shifts, Labor Transfers, and Income Distribution

tion rate to our large cities must increase or employment in smaller urban centers in rural areas must be expanded. The problems of our major cities hardly recommend the former on either social or economic grounds. All those capable of acquiring them must be given the basic education and skills that will enable them to benefit from potentially greater productivity in nonfarm employment. And, finally, racial discrimination must be removed from the nonfarm labor markets before the movement of Negroes out of agriculture promises to reduce income inequity between the races. Hopefully, if these changes could be brought about, the actual effects of labor mobility would conform to the beliefs we have cherished so long.