Human Capital Portability and Worker Career Choices : Evidence from M&A Bankers

How does firm-specific human capital shape workers’ career trajectories? We develop a model that allows workers to accumulate both portable and non-portable (firm-specific) human capital through their work experience and learn about their match quality with current employers over time. The model is estimated using granular data on M&A bankers. We show that bankers accumulate a significant fraction of non-portable human capital, and this non-portability influences their productivity, job turnover, and career choices between sectors offering high returns on human capital and sectors offering generalizable skills. Our results have implications for high-skill workers in human capital-intensive industries in general