New IZA DPs -- Firm Behavior
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IZA DP Alerts
May 25, 2026, 7:33:24 AMMay 25
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New IZA Discussion Papers brought to you by IZA@LISER
Dear Italo Gutierrez,
These new IZA Discussion Papers are now available online.
DP 18502 - Bagger/Elholm/Maibom/Vejlin:
Unpacking the Wage Sorting Trend
DP 18539 - Adrjan/Jessen/Victoria Lanzón:
Restricting Temporary Contracts Increases Firm-Provided Training: Evidence from Spain
DP 18564 - Boeri/Crescioli/Garnero/Luisetto:
Collective Bargaining and Monopsony: The Regulation of Noncompete Agreements in France
DP 18566 - Estefan/Gerhard/Kaboski/Kondo/Qian:
Outsourcing Policy and Worker Outcomes: Causal Evidence from a Mexican Ban
DP 18577 - Gomez/Bryson/Willman:
Trust and Cooperation in Labor-Management Relations
DP 18612 - Carrillo/Donaldson/Pomeranz/Singhal:
Misallocation in Firm Production: A Nonparametric Analysis Using Procurement Lotteries
Please find the abstracts and download links below.
IZA DP No. 18502
Jesper Bagger, Malthe Elholm, Jonas Maibom, Rune Majlund Vejlin:
Unpacking the Wage Sorting Trend
Abstract:
Using 1980-2019 Danish matched employer-employee data, we unpack the rise in wage sorting - the correlation between worker and firm wage fixed effects (Abowd et al., 1999) - from 0.06 to 0.18. The rise is driven entirely by reallocation of employment from persistently low-sorting to persistently high-sorting firms, with the average sorting contribution of any given firm remaining stable over time. A decomposition shows that 60 % reflects reallocation among surviving firms and 40 % firm turnover through entry and exit. Regression analysis identifies firm entry and exit and industry reallocation as the dominant firm-side drivers, and rising educational attainment as the key worker-side factor - reflecting concentration of educated workers in high-sorting firms rather than a systematic tendency of educated workers to form high-sorting matches across all employers. Event studies establish direct job-to-job moves as the primary mechanism through which reallocation is implemented a t the worker-level.
https://docs.iza.org/dp18502.pdf
IZA DP No. 18539
Pawel Adrjan, Jonas Jessen, Carlos Victoria Lanzón:
Restricting Temporary Contracts Increases Firm-Provided Training: Evidence from Spain
Abstract:
We examine whether restricting temporary contracts increases firms' investment in worker training, exploiting Spain’s 2022 labour market reform. Using 3.1 million online job postings from 2018 to 2024, we implement a difference-in-differences design that leverages pre-reform variation in reliance on temporary contracts across occupations. More exposed occupations shifted toward permanent hiring and increased advertised training relative to less exposed occupations. Training rose by 4.3 percentage points, fully closing the pre-reform gap by 2024. These results provide evidence that longer expected employment duration increases firms' investment in training, identifying a channel through which labour market regulation can shape human capital formation.
https://docs.iza.org/dp18539.pdf
IZA DP No. 18564
Tito Boeri, Tommaso Crescioli, Andrea Garnero, Lorenzo Giovanni Luisetto:
Collective Bargaining and Monopsony: The Regulation of Noncompete Agreements in France
Abstract:
Can collective bargaining mitigate monopsony power? This paper addresses this question by examining how the regulation of noncompete agreements for employees by collective agreements affects firm-level markdowns in the French manufacturing sector. Using a staggered difference-in-differences approach, we find that the regulation of noncompetes set by collective agreements leads to a 1.3%–2.2% reduction in markdowns on average. The effect grows over time and is more pronounced for smaller, less productive firms that pay lower wages. Studying a landmark decision of the French Supreme Court that introduced the obligation to have a compensation to consider a noncompete enforceable, we find a significant complementarity between the regulation of noncompetes at the national level (e.g., via case law) and sectoral collective bargaining. By enhancing compliance or imposing further restrictions, collective bargaining can serve as an effective tool to regulate the use of noncompete agre ements.
https://docs.iza.org/dp18564.pdf
IZA DP No. 18566
Alejandro Estefan, Roberto Gerhard, Joshep P. Kaboski, Illenin Kondo, Wei Qian:
Outsourcing Policy and Worker Outcomes: Causal Evidence from a Mexican Ban
Abstract:
Using Mexican economic census data from 1994 to 2019, we document a rising trend in domestic outsourcing, particularly among large firms, and a negative association between outsourcing and labor compensation, including profit sharing and social security. We leverage higher-frequency data from a manufacturing panel survey, matched employer–employee data, and a ban on domestic outsourcing in 2021 to show that the ban reduced outsourcing, increased labor’s share, and reduced markdowns without raising total labor costs or affecting employment, output, or productivity. We propose a theoretical model in which corporate fiscal incentives drive outsourcing and account for the observed empirical patterns.
https://docs.iza.org/dp18566.pdf
IZA DP No. 18577
Rafael Gomez, Alex Bryson, Paul Willman:
Trust and Cooperation in Labor-Management Relations
Abstract:
We review the literature on trust and cooperation with application to labour-management relations. We begin with the neo-classical economic view of self-regarding individuals operating with perfect information and show that once one abandons the dyadic case with perfect information, cooperation deteriorates as group size increases and the probability of behavioural or perceptual error rises. We show that self-regarding models have no way of explaining cooperative outcomes between management and labour under typical conditions and lead to less optimal forms of non-cooperative strategic bargaining. By way of contrast, models of cooperation with other-regarding preferences and trust – drawn from behavioural economics, social psychological, economic sociology and industrial relations literatures – show that a high level of cooperation can be attained even in large groups, with modest informational requirements, and that conditions allowing the evolution of trust and other-regardi ng social preferences are plausible and find empirical support. We also show that actors’ perceptions of the employment relationship underpin assumptions of human nature, which is what inevitably determines strategies used in labour-management relations.
https://docs.iza.org/dp18577.pdf
IZA DP No. 18612
Paul Carrillo, Dave Donaldson, Dina Deborah Pomeranz, Monica Singhal:
Misallocation in Firm Production: A Nonparametric Analysis Using Procurement Lotteries
Abstract:
This paper develops new tools to study misallocation that do not require assumptions about the heterogeneity of firms’ technologies. We show how features of the distribution of marginal products can be identified from exogenous variation in firms’ input use and used both to test for misallocation and to quantify its resulting welfare losses. We apply this method to a setting with exogenous demand shocks from public procurement contracts for construction services in Ecuador. Our results reject the null of efficiency but our estimates of the resulting welfare losses from misallocation are small.
https://docs.iza.org/dp18612.pdf
These new IZA Discussion Papers are now available online.
DP 18502 - Bagger/Elholm/Maibom/Vejlin:
Unpacking the Wage Sorting Trend
DP 18539 - Adrjan/Jessen/Victoria Lanzón:
Restricting Temporary Contracts Increases Firm-Provided Training: Evidence from Spain
DP 18564 - Boeri/Crescioli/Garnero/Luisetto:
Collective Bargaining and Monopsony: The Regulation of Noncompete Agreements in France
DP 18566 - Estefan/Gerhard/Kaboski/Kondo/Qian:
Outsourcing Policy and Worker Outcomes: Causal Evidence from a Mexican Ban
DP 18577 - Gomez/Bryson/Willman:
Trust and Cooperation in Labor-Management Relations
DP 18612 - Carrillo/Donaldson/Pomeranz/Singhal:
Misallocation in Firm Production: A Nonparametric Analysis Using Procurement Lotteries
Please find the abstracts and download links below.
IZA DP No. 18502
Jesper Bagger, Malthe Elholm, Jonas Maibom, Rune Majlund Vejlin:
Unpacking the Wage Sorting Trend
Abstract:
Using 1980-2019 Danish matched employer-employee data, we unpack the rise in wage sorting - the correlation between worker and firm wage fixed effects (Abowd et al., 1999) - from 0.06 to 0.18. The rise is driven entirely by reallocation of employment from persistently low-sorting to persistently high-sorting firms, with the average sorting contribution of any given firm remaining stable over time. A decomposition shows that 60 % reflects reallocation among surviving firms and 40 % firm turnover through entry and exit. Regression analysis identifies firm entry and exit and industry reallocation as the dominant firm-side drivers, and rising educational attainment as the key worker-side factor - reflecting concentration of educated workers in high-sorting firms rather than a systematic tendency of educated workers to form high-sorting matches across all employers. Event studies establish direct job-to-job moves as the primary mechanism through which reallocation is implemented a t the worker-level.
https://docs.iza.org/dp18502.pdf
IZA DP No. 18539
Pawel Adrjan, Jonas Jessen, Carlos Victoria Lanzón:
Restricting Temporary Contracts Increases Firm-Provided Training: Evidence from Spain
Abstract:
We examine whether restricting temporary contracts increases firms' investment in worker training, exploiting Spain’s 2022 labour market reform. Using 3.1 million online job postings from 2018 to 2024, we implement a difference-in-differences design that leverages pre-reform variation in reliance on temporary contracts across occupations. More exposed occupations shifted toward permanent hiring and increased advertised training relative to less exposed occupations. Training rose by 4.3 percentage points, fully closing the pre-reform gap by 2024. These results provide evidence that longer expected employment duration increases firms' investment in training, identifying a channel through which labour market regulation can shape human capital formation.
https://docs.iza.org/dp18539.pdf
IZA DP No. 18564
Tito Boeri, Tommaso Crescioli, Andrea Garnero, Lorenzo Giovanni Luisetto:
Collective Bargaining and Monopsony: The Regulation of Noncompete Agreements in France
Abstract:
Can collective bargaining mitigate monopsony power? This paper addresses this question by examining how the regulation of noncompete agreements for employees by collective agreements affects firm-level markdowns in the French manufacturing sector. Using a staggered difference-in-differences approach, we find that the regulation of noncompetes set by collective agreements leads to a 1.3%–2.2% reduction in markdowns on average. The effect grows over time and is more pronounced for smaller, less productive firms that pay lower wages. Studying a landmark decision of the French Supreme Court that introduced the obligation to have a compensation to consider a noncompete enforceable, we find a significant complementarity between the regulation of noncompetes at the national level (e.g., via case law) and sectoral collective bargaining. By enhancing compliance or imposing further restrictions, collective bargaining can serve as an effective tool to regulate the use of noncompete agre ements.
https://docs.iza.org/dp18564.pdf
IZA DP No. 18566
Alejandro Estefan, Roberto Gerhard, Joshep P. Kaboski, Illenin Kondo, Wei Qian:
Outsourcing Policy and Worker Outcomes: Causal Evidence from a Mexican Ban
Abstract:
Using Mexican economic census data from 1994 to 2019, we document a rising trend in domestic outsourcing, particularly among large firms, and a negative association between outsourcing and labor compensation, including profit sharing and social security. We leverage higher-frequency data from a manufacturing panel survey, matched employer–employee data, and a ban on domestic outsourcing in 2021 to show that the ban reduced outsourcing, increased labor’s share, and reduced markdowns without raising total labor costs or affecting employment, output, or productivity. We propose a theoretical model in which corporate fiscal incentives drive outsourcing and account for the observed empirical patterns.
https://docs.iza.org/dp18566.pdf
IZA DP No. 18577
Rafael Gomez, Alex Bryson, Paul Willman:
Trust and Cooperation in Labor-Management Relations
Abstract:
We review the literature on trust and cooperation with application to labour-management relations. We begin with the neo-classical economic view of self-regarding individuals operating with perfect information and show that once one abandons the dyadic case with perfect information, cooperation deteriorates as group size increases and the probability of behavioural or perceptual error rises. We show that self-regarding models have no way of explaining cooperative outcomes between management and labour under typical conditions and lead to less optimal forms of non-cooperative strategic bargaining. By way of contrast, models of cooperation with other-regarding preferences and trust – drawn from behavioural economics, social psychological, economic sociology and industrial relations literatures – show that a high level of cooperation can be attained even in large groups, with modest informational requirements, and that conditions allowing the evolution of trust and other-regardi ng social preferences are plausible and find empirical support. We also show that actors’ perceptions of the employment relationship underpin assumptions of human nature, which is what inevitably determines strategies used in labour-management relations.
https://docs.iza.org/dp18577.pdf
IZA DP No. 18612
Paul Carrillo, Dave Donaldson, Dina Deborah Pomeranz, Monica Singhal:
Misallocation in Firm Production: A Nonparametric Analysis Using Procurement Lotteries
Abstract:
This paper develops new tools to study misallocation that do not require assumptions about the heterogeneity of firms’ technologies. We show how features of the distribution of marginal products can be identified from exogenous variation in firms’ input use and used both to test for misallocation and to quantify its resulting welfare losses. We apply this method to a setting with exogenous demand shocks from public procurement contracts for construction services in Ecuador. Our results reject the null of efficiency but our estimates of the resulting welfare losses from misallocation are small.
https://docs.iza.org/dp18612.pdf
IZA DP Alerts | www.iza.org
If you have trouble downloading the papers, or for any other questions regarding the IZA Discussion Paper Series, please contact iza...@liser.lu.
IZA@LISER Network
Luxembourg Institute of Socio-Economic Research (LISER)
11, Porte des Sciences, L-4366 Esch-sur-Alzette / Belval
Privacy Policy | Manage your subscriptions
If you have trouble downloading the papers, or for any other questions regarding the IZA Discussion Paper Series, please contact iza...@liser.lu.
IZA@LISER Network
Luxembourg Institute of Socio-Economic Research (LISER)
11, Porte des Sciences, L-4366 Esch-sur-Alzette / Belval
Privacy Policy | Manage your subscriptions
IZA DP Alerts
May 25, 2026, 7:35:03 AMMay 25
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