Human Capital Reallocation Across Firms: Evidence from Idiosyncratic Shocks

62 Pages Posted: 2 Sep 2021 Last revised: 3 Oct 2023

See all articles by Erik Gilje

Erik Gilje

University of Pennsylvania - The Wharton School

Jérôme Taillard

Babson College

Linghang Zeng

Babson College - Finance Division

Multiple version iconThere are 2 versions of this paper

Date Written: August 14, 2021

Abstract

We study human capital reallocation following firm-specific idiosyncratic shocks. We analyze relegation battles in the English Premier League as this setting offers well-identified idiosyncratic shocks as well as both individual-level and firm-level productivity metrics. Following a negative idiosyncratic shock, we find that relatively more productive players move to more productive clubs and maintain their long-term productivity. They get replaced with lower productivity players. Overall, our results show that in a setting with highly transferable and observable skills, idiosyncratic shocks lead to a reallocation of human capital that moves the industry towards a better overall match between individual-level and firm-level productivity.

Keywords: Idiosyncratic shock, human capital, reallocation, productivity, English Premier League, relegation

JEL Classification: G31, G32, G33, J24

Suggested Citation

Gilje, Erik and Taillard, Jérôme and Zeng, Linghang, Human Capital Reallocation Across Firms: Evidence from Idiosyncratic Shocks (August 14, 2021). Available at SSRN: https://ssrn.com/abstract=3905244 or http://dx.doi.org/10.2139/ssrn.3905244

Erik Gilje

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Jérôme Taillard

Babson College ( email )

323 Tomasso Hall
Babson Park, MA 02457
United States
6145994184 (Phone)

HOME PAGE: http://https://www.babson.edu/academics/faculty/faculty-profiles/jerome-taillard.php

Linghang Zeng (Contact Author)

Babson College - Finance Division ( email )

Babson Park, MA 02457-0310
United States

HOME PAGE: http://sites.google.com/view/linghang-zeng

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