Abhinav Gupta, University of North Carolina-Chapel Hill
Naman Nishesh, Indian School of Business
Elena Simintzi, University of North Carolina-Chapel Hill
Abstract: This paper studies the impact of employee output information disclosure through GitHub on labor reallocation towards large firms. GitHub, which is the world’s largest software management platform, tracks and publicly displays real-time individual contributions. In 2016, a policy change enabled GitHub users to display their contributions more accurately on their profiles. Following this update, employees with 1 standard deviation higher GitHub contributions witnessed a 5.7% increase in job transitions to large firms, predominantly at the expense of smaller companies. Whileproductive individuals left small firms for senior roles in larger companies, the latter retained them through internal promotions. The departure of productive workers led to an overall reduction in employment growth and productivity for small firms with more productive employees prior to the shock. Our findings highlight the role of labor-related big data in amplifying the dominance of large firms in recent years.
Discussant: Bo Bian, University of British Columbia
Abstract: In this paper we develop a new rationale for the existence of business groups (BGs) and conglomerates that operate in multiple locations within the same country: They arbitrage local labor markets. We show that BG firms grow less if firms of the same group in other locations can offer more attractive access to employees in their local labor market. On the flip side BG firms grow faster if they offer such access to other firms in the group. Attractiveness is measured as labor costs, labor supply, and labor fit between the firm and the local labor force. Local labor conditions are of similar importance for location decisions of business group firms as general agglomeration economies. Internal flows of employees between BG firms account for only a small portion of the variation in employment growth rates. We conclude that business groups predominantly move jobs, but not employees, between their locations. As such, they arbitrage local labor markets.
Discussant: Daniel Ferreira, London School of Economics and Political Science
Lawrence Schmidt, Massachusetts Institute of Technology
Cristina Tello-Trillo, U.S. Bureau of the Census
Abstract: We examine the causal effect of employer-sponsored health insurance premiums on firms’ employment and employment outcomes of low- versus high-income workers. To address endogeneity concerns, we instrument for premiums using idiosyncratic variation in insurers’ recent losses, which is plausibly exogenous to their customers who are employers. Using IRS microdata, we show that following an exogenous increase in premiums, firms reduce employment. Lower-income workers become more likely to be separated from their jobs, become unemployed, experience a large earning reduction upon job separation, and lower wage growth rate even when retained.
Discussant: Emily Gallagher, University of Colorado-Boulder
