Job Hopping, Information Technology Spillovers, and Productivity Growth

It is found that firms derive significant productivity benefits from the IT investments of other firms from which they hire IT labor, and the productivity benefits of locating near other IT-intensive firms can primarily be explained by the mobility of technical workers within the region.

Abstract

The movement of information technology (IT) workers among firms is believed to be an important mechanism by which know-how complementary to IT-related innovations diffuses throughout the economy. We use a newly developed source of employee micro-data - online resume databases - to model IT workers' mobility patterns. We find that firms derive significant productivity benefits from the IT investments of other firms from which they hire IT labor. Our estimates indicate that over the last two decades, productivity spillovers from the IT investments of other firms transmitted through this channel have contributed 20-30% as much to a firm's productivity growth as the firm's own IT investments. Evidence for regional IT spillovers disappears when IT labor flows are directly used to measure the spillover pool. These effects are attributable specifically to the flow of IT workers among firms, not other occupations, ruling out some alternative explanations related to the similarity of firms that participate in the same labor flow network.