BICEPS/SSE Riga Research Seminar: Employee-Owned Firms, First Work Experience, and Young Workers’ Careers

We invite you to a BICEPS/SSE Riga research seminar, which will take place on Thursday, December 15, at 17:00, SSE Riga room 611.

We are delighted to welcome Jose Garcia-Louzao as the speaker. Jose is a Principal Research Economist at the Applied Macroeconomics Research Division of the Bank of Lithuania, a Research Fellow at Vilnius University and a Research Afilliate of the CESifo Research Network. His research interest is in Applied Microeconometrics with a focus on Labor Economics. Read more about the speaker here.

Speaker: Jose Garcia-Louzao (Bank of Lithuania, Vilnius University, CESifo)
Title: Employee-Owned Firms, First Work Experience, and Young Workers’ Careers (co-authored with Gabriel Burdin)
Time: Thursday, December 15, 17:00
Venue: SSE Riga, room 611

Employee ownership (EO) attracts considerable attention in academic and policy circles. While most studies assess the impact of EO by focusing on contemporaneous worker-firm relationships, surprisingly little is known about its dynamic effects on young workers’ career paths. Using detailed administrative data from Spain, we investigate the impact of having an initial work experience in a worker cooperative versus a conventional firm on subsequent earnings. We find that young workers’ exposure to cooperatives at the time of labour market entry reduces earnings by about 8% during the first 15 years in the labour market. The selection of individuals with low initial ability in cooperatives does not appear to be a relevant channel. Our results rather seem to be related to differences in the wage returns to experience and job mobility. On the one hand, we document lower wage returns to experience acquired in worker cooperatives, but no differences in subsequent career progression in terms of promotions. On the other hand, we find that workers who had their first job in a worker cooperative show a strong attachment to the cooperative sector and are less likely to voluntarily leave their employers. Taken together, our findings suggest the existence of cooperative-specific non-pecuniary job attributes that might compensate for lower lifetime earnings.