Is Labor Mobility a Channel for Spillovers from Multinationals? Evidence from Norwegian Manufacturing

Abstract

Does hiring workers with experience from multinationals (MNEs) increase productivity in non-MNEs? Tracing worker flows between plants in Norwegian manufacturing during the 1990s, I find a positive correlation between the share of workers with MNE experience in non-MNEs and the productivity of these plants. Workers with MNE experience contribute 20%% more to the productivity of their plant than workers without such experience, even after controlling for differences in unobservable worker characteristics. The private return to mobility is smaller than the productivity effect at the plant level, which suggests that labor mobility from MNEs to non-MNEs represents a true knowledge externality. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.