Munich Personal RePEc Archive

How Substitutable Are Workers? Evidence from Worker Deaths

Jäger, Simon and Heining, Jörg (2019): How Substitutable Are Workers? Evidence from Worker Deaths.

[thumbnail of jh_worker_substitutability.pdf]

Download (3MB) | Preview


To assess the substitutability between workers within a firm, and between incumbent workers and outsiders, we estimate how exogenous worker exits affect a firm’s demand for incumbent workers and new hires. Using matched employer-employee data from Germany, we analyze the effects of 34,000 unexpected worker deaths and show that these worker exits on average raise the remaining workers’ wages and retention probabilities for a period of several years. The average effect masks substantial heterogeneity: Coworkers in the same occupation as the deceased see positive wage effects; coworkers in other occupations instead experience wage decreases when a high-skilled worker or manager dies. Finally, when the external labor market in the deceased’s occupation is thin, incumbents’ wages respond more and external hiring responds less to a worker death. Taken together, our findings imply that incumbent workers are closer substitutes to one another compared to outsiders, that high-skilled workers and managers are complements to coworkers in other occupations, and that thin external markets for skills lead to higher firm-specificity of human capital and lower replaceability of incumbents.

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.