Fabiano Dal-Ri - Research

WORK IN PROGRESS

Managerial Poaching and Talent Reallocation
submitted to the Journal of Political Economy

with Thomas Jungbauer, Daniela Scur, and Yi Chen [WORKING PAPER] [SSRN]

Abstract: Managers are an important component of positive talent reallocation: when a manager is poached, workers tend to follow. Using the universe of formal sector contracts in Brazil, we document that the co-movement of workers following a managerial poaching event is substantially larger than following a non-managerial one. We propose that managers hold high-quality personnel-specific information about workers that goes beyond what is observable to outside firms. We formalize this in a model of managerial poaching with asymmetric employer learning, in which more productive firms poach managers for their information about workers and subsequently raid high-ability employees. We derive testable predictions and show that the data supports each of them. In equilibrium, information rents lead to inefficiently low poaching, making managers both a catalyst for efficient worker reallocation and a hindrance to it reaching its welfare-optimal level.

Presentations and Conferences (co-authors): Finger Lakes Labor Conference, Society for Institutional & Organizational Economics, Organizational Economics Workshop [Sydney], NBER Summer Institute Personnel Economics [Boston], Labor Workshop [Cornell], NBER Organizational Economics Spring Meetings [Boston], Empirical Management Conference [Harvard], University of Vienna, University of Illinois Urbana-Champaign, Indiana University, Organization@Cornell [Cornell], Southern Economic Association [Washington, DC], Monash University, Vienna University of Economics and Business Administration, University of Hong Kong.

What Does It Take to Be a Business Owner? Evidence from Transitions from Job Loss
solo-authored [WORKING PAPER] [PRESENTATION]

Abstract: The pathways leading to business ownership are varied, posing an empirical challenge in identifying the role of owners' skills. This paper focuses on a specific pathway: transitions to business ownership following job loss, leveraging mass layoff events for identification. I combine two comprehensive data sets from Brazil: the firm registry (which includes self-employed workers and small business owners) and matched employer-employee records. Comparing laid-off workers to a matched sample of non-laid-off workers, I find a four-fold increase in the quarterly business formation probability following job loss, a result driven by skilled individuals. In particular, managers are 5 percentage points more likely to start longer-lasting businesses (relative to an average of 60 percent), as they start ventures in industries where they worked before while also identifying industries with higher growth potential. To benchmark these results, I compare businesses started after job loss to those founded by workers who quit. While survival rates are similar, the skills driving survival are different: managerial experience is not associated with business survival among owners who quit. These findings highlight the importance of identifying post-job-loss business owners as a distinct group when evaluating the relationship between owners' skills and business outcomes. My results also suggest a path for more effective business support policies by both public and private actors, which should account for owners' career trajectories and skill sets.

Presentations and Conferences: Brown Bag Lunch Seminar [IFC], American Economic Association Annual Meeting [San Francisco], Empirical Management Conference [Harvard], Applied Economics and Policy Seminar [Cornell], Labor Seminar [Cornell], Innovation, Entrepreneurship, and Technology Seminar [Cornell], Development Seminar [Cornell], Collaboration for International Development Economics Research Seminar [Cornell], European Association of Labor Economists Conference [Bergen], European Society of Population Economics Conference [Rotterdam], German Development Economics Conference [Hannover], Comparative Analysis of Enterprise Data Conference [Penn State], Emerging Markets Institute PhD Conference [Cornell], Development Micro Seminar [Cornell], Labor Work in Progress Seminar [Cornell], Latin American and Caribbean Economic Association Annual Meeting [Bogotá], The Work in Progress Seminar [Cornell], Applied Micro Seminar [Insper]

Media: AEA Interview

Displacement Events and Job-Driven Scarring
with Ian Schmutte and Daniela Scur

Abstract: We study how job loss affects the earnings, employment, and wage of managers. Using event studies around mass layoff events for Brazilian firms we find that, on average, displaced workers lose around 60 percent of their earnings in the year after job loss, and after three years have earnings 25 log points below comparable non-displaced workers. The earnings effect comes from a sharp, but temporary drop in the number of months worked per year, combined with a sharp but persistent drop in wages of around 20 log points. For managers, the wage penalty is over twice as large relative to non-managers. Less than 15 percent of the wage losses for managers can be explained by movements to employers that pay all workers less. Taken together, these results are consistent with a model in which managers either accumulate significant job-specific rents that are destroyed on separation, or they face worse market conditions and scarring after displacement, perhaps because they held responsible for the mass displacement event that precipitated their termination.

Presentations and Conferences: Economics of Workplace Environment [Copenhagen]

Presentations and Conferences (co-authors): Mini-Conference on Productivity [McMaster], Junior Micro/Macro Labor Conference [Columbia], CESifo Summer Institute [Veneza], Society of Labor Economists Meeting [Philadelphia], Development Seminar [Cornell], Empirical Management Conference [World Bank]

Understanding Workers' Migration Response do Shocks: Evidence from Brazil
with Takshil Sachev

Abstract: This paper investigates the impact of unexpected employment shocks on workers' migration decisions using matched employer-employee data from Brazil's formal sector. Leveraging an event-study design, we find that workers who separate from their firm during a mass layoff face a significant and persistent 10% decline in their earnings relative to non-laid-off workers. We also find that laid-off workers are 15 percentage points more likely to migrate to another labor market. While all laid-off workers migrate at higher rates than non-laid-off workers, we find that men migrate at higher rates than women, and that non-white workers migrate more than white workers. We explain these patterns through a descriptive exercise comparing wage trajectories of migrant and non-migrant laid-off workers. We find 1.5% higher earnings among migrants than stayers, with almost all gains concentrated among men and larger gains among non-white workers. We complement our empirical evidence with a location-choice model that delivers a gravity equation for bilateral migration flows. Gravity estimates indicate that a one-standard-deviation increase in layoff intensity raises flows out of the origin by roughly 1-3%. Taken together, the findings show that mass layoffs trigger substantial but selective geographic reallocation, and that unequal access to migration shapes the distributional consequences of employment shocks.

Presentations and Conferences: European Association of Labor Economists* [Barcelona]

Presentations and Conferences (co-author): Collaboration for International Development Economics Research Seminar [Cornell], Cornell TYS, CUFE Beijing (Best Paper Award), Midwest International Economic Development Conference* [Wisconsin Madison], Lakes Development Economics Workshop* [Rochester], European Society of Population Economics* [Helsinki]

* indicates upcoming presentations.

Management of Heathcare Facilities and Patient Attendance During Major Disruptions: Evidence from Kenya
with Kathryn Andrews, Roberta Gatti, Renata Lemos, Mario Macis, and Lydia Nakhone

Internal Labor Markets in an Emerging Economy
with Benjamin Leyden, Heloísa de Paula, Daniela Scur, and Lars Vilhuber