Comobility and Wages

Abstract: 

To date, virtually all work regarding job mobility and wages has been conducted at the individual level. To some extent, this is not surprising given that most firms post individual job listings, interview individuals for jobs, and extend individual job offers. Most models of human capital focus on the accumulation of individual skills, including firm-specific skills lost and general skills preserved during job moves. But prior literature misses a potentially important social aspect of human capital, as much if not most work is performed in groups which develop shared skills and complementarities. A few studies of elite professionals in select industries suggest that organizations can profit from transferring joint expertise by hiring multiple workers from the same firm (hereafter, comobility).

If the gains from transferring joint expertise are shared with workers, co-moving to another firm might represent an attractive method by which workers explore external labor markets. Following a field study on the comobility phenomenon, we provide the first population-level characterization of comobility by examining manufacturing and service workers in Denmark between 1999 and 2006. Although comobility appears to be a relatively rare event—only one in forty job moves occurs jointly with coworkers—comobility yields wage gains 5.5% higher than individual mobility. Robustness tests establish that the comobility wage premium is not driven by “prized” vs. “trailing” workers and is not solely explained by referrals, opportunity costs, or employee raiding.