Learning Through Hiring: Knowledge From New Workers as an Explanation of Endogenous Growth

This paper develops an endogenous growth model in which the job-to-job transition of workers provides a channel for the spillover of knowledge between firms. Workers learn some of the productive knowledge used by their employer while working on the job. When a worker moves to another firm, they are able to adapt some of this knowledge for use at the hiring firm. Firms endogenously control their exposure to new knowledge by choosing the intensity that they post vacancies in a search-and-matching labor market. It is shown that under a set of assumptions regarding the initial distribution of firm types and the vacancy posting cost function, the competitive equilibrium leads to a balanced growth path that has a constant growth rate and stationary distribution of firm size.