Sydnee Caldwell and Nikolaj Harmon: Outside Options, Bargaining, and Wages: Evidence from Coworker Networks: "We develop a strategy that isolates changes in a worker’s information about her outside options...

...Individuals often learn about jobs through social networks, including former coworkers. We implement this strategy using employer-employee data from Denmark that contain monthly information on wages and detailed measures of worker skills. We find that increases in labor demand at former coworkers’ current firms lead to job-to-job mobility and wage growth.... Larger changes are necessary to induce a job-to-job transition than to induce a wage gain. Specification tests leveraging alternative sources of variation suggest these responses are indeed due to information rather than unobserved demand shocks. Impacts on earnings are concentrated among workers in the top half of the skill distribution...


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