How Substitutable Are Workers? Evidence from Worker Deaths

Simon Jäger and Jörg Heining

MPRA Paper from University Library of Munich, Germany

Abstract: 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.

Keywords: Worker; Firm; Germany (search for similar items in EconPapers)
JEL-codes: J0 (search for similar items in EconPapers)
Date: 2019-01-01, Revised 2019-01-01
References: Add references at CitEc
Citations: View citations in EconPapers (45)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/109757/1/jh_worker_substitutability.pdf original version (application/pdf)

Related works:
Working Paper: How Substitutable Are Workers? Evidence from Worker Deaths (2022)
Working Paper: How Substitutable Are Workers? - Evidence from Worker Deaths (2022)
Working Paper: How Substitutable Are Workers? Evidence from Worker Deaths (2022)
Working Paper: How Substitutable Are Workers? Evidence from Worker Deaths (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:109757

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().