Is Labor Mobility a Channel for Spillovers from Multinationals? Evidence from Norwegian Manufacturing

This paper documents labor mobility flows from multinationals (MNEs) to non-MNEs in Norwegian manufacturing during the 1990s. 14,400 workers in MNEs move to non-MNEs during this period. By the year 2000, 28 percent of the non-MNEs employed workers with experience from MNEs. Consistent with spillovers through mobility, I estimate a robust and significantly positive correlation between the share of workers with MNE-experience and the productivity of non-MNEs. Workers with MNE-experience contribute 20% more to the productivity of their plant than workers without experience from MNEs, even after controlling for differences in unobservable worker characteristics. The difference between the private returns to mobility and the productivity effect at the plant level suggests that labor mobility from MNEs to non-MNEs represents a true knowledge externality.