In the knowledge economy, skilled workers play an important role in innovation and economic growth. However, small firms may not be able to keep these workers. We study how the knowledge-skill complementarity relates to job duration in small and large firms, using a Portuguese linked employer-employee data set. We select workers displaced by firm closure and estimate a discrete-time hazard model with unobserved heterogeneity on the subsequent job relationship. To account for the initial sorting of displaced workers to firms, we introduce weights in the model according to the individual propensity of employment in a small firm. Our results show a lower premium on skills in terms of job duration for small firms. Furthermore, we find evidence of a strong knowledge-skill complementarity in large firms, where the accumulation of firm-specific human capital also plays a more important role in determining the hazard of job separation. For small firms, the complementarity does not translate into longer job duration, even for those with pay policies above the market. Overall, small knowledge-intensive firms struggle to retain high skill workers and find it harder to leverage the knowledge-skill complementarity.
Technological change, being the adoption of new production processes or launching new products, affects employment and the relative demand for skills. In this context, we aim to study workers? job duration and the role of technology-skills complementarities in manufacturing firms. Using a Portuguese matched employer?employee longitudinal data set, we apply discrete-time duration models allowing for unobserved heterogeneity. Our results show that technological intensity reinforces the positive relationship between skills and job duration. We also find that the accumulation of specific human capital measured by time dependence plays a stronger role on reducing the hazard of job separation in more technology-intensive firms.
Low-paid workers have a higher risk of unemployment and poverty, and have been a lasting concern of policy makers. We investigate the duration of low-pay spells and transitions out of low-pay for labor market entrants, using a discrete-time competing risks framework, weighted by the probability of low-wage entry, to account for different transition paths out of low-pay, including firm change. We find that college-educated workers may use low-pay jobs as stepping stones to higher-paid jobs in other firms. Low-pay jobs may be a trap for the low-skilled, but also a way to avoid extended periods of unemployment. Finally, large firms and knowledge-intensive industries provide more opportunities to leave low-wage.
