The distribution of the gains from spillovers through worker mobility between workers and firms

- We estimate output gains from spillovers through worker mobility and their distribution.
- Of these total output gains (0.1% per year), two-thirds goes to the firms.
- At most 8% goes to the workers who bring spillovers.
- The other workers enjoy the remainder.
- This gains distribution implies abnormally high rents to the hiring firms.

Knowledge spillovers through worker mobility between firms, found in previous research, imply that knowledge production within firms creates a positive externality to the hiring firms and their workers. We calculate the shares in the gains from spillovers retained by these parties using matched employer-employee data from Danish manufacturing. We find that around two-thirds of the total output gain (0.1% per year) is netted by the firms as extra profit, about a quarter goes to the incumbent workers as extra wages, while the workers who bring spillovers receive no more than 8% of it. This gains distribution, which favors the hiring firms, is similar for different types of moving workers, and is stable over time.