Job market paper

Heterogeneous Skill Portability across Firms

Skills learned on the job vary in their portability across employers. Some are portable and retain their value when workers change jobs, while others are firm-specific and are only productive at the employer where they were acquired. This paper studies how differences across firms in the portability of skills learned on the job shape wage inequality within occupations and wage losses following displacement. I develop an equilibrium search model in which firms differ in the extent to which they equip workers with portable versus firm-specific human capital. I estimate the model using French administrative data that link workers’ careers to firm balance sheets and closures. The estimated share of on-the-job learning that is firm-specific averages 55%, with substantial heterogeneity across firms. Counterfactual simulations show that equalizing this share across firms at its baseline mean reduces within-occupation variance in log wages by 18%. This decline is concentrated among workers who enter the labor market with fewer skills and whose wages depend more on human capital accumulated on the job. Eliminating cross-firm differences in the portability of learning also reduces average wage losses two to four years after displacement by 23%.

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