Elisabeth Bublitz, 22 July 2015

Workers who switch firms can lose firm-specific human capital. This column presents evidence of how moving to occupationally specialised firms can compensate workers for wage losses that are caused by ‘specific human capital’. When switches occur between firms that are very distant from each other in terms of their knowledge structure, occupationally specialised firms are prepared to pay a wage premium that can outweigh the costs of such long-distance switches.

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