Human Capital Reallocation Across Firms: Evidence from Idiosyncratic Shocks / Erik P. Gilje, Jérôme P. Taillard, Linghang Zeng.

Format:

Book

Author/Creator:

Gilje, Erik P.

Contributor:

National Bureau of Economic Research.

Taillard, Jérôme P.

Zeng, Linghang.

Series:

Working Paper Series (National Bureau of Economic Research) no. w29782.

NBER working paper series no. w29782

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2022.

Summary:

We study human capital reallocation following firm-specific idiosyncratic shocks. Theory offers diverging predictions as to whether human capital gets reallocated to its most productive use following these shocks. To empirically test these predictions, we focus on relegation battles in the English Premier League. This setting offers well identified idiosyncratic shocks as well as both individual-level and firm-level productivity metrics. We find that human capital exits firms after a negative idiosyncratic shock. Specifically, we find that more productive players move to more productive clubs and maintain their long-term productivity. They get replaced with lower productivity players. Overall, our results show that in a setting with highly transferable skills, idiosyncratic shocks lead to a reallocation of human capital that moves an industry towards a better overall match between individual-level and firm-level productivity.

Notes:

Print version record

February 2022.