Becker Friedman Institute

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Production and Learning in Teams

The effect of coworkers on the learning and the productivity of an individual is measured combining theory and data. The theory is a frictional equilibrium model of the labor market in which production and the accumulation of human capital of an individual are allowed to depend on the human capital of coworkers. The data is a matched employer-employee dataset of US firms and workers. The measured production function is supermodular. The measured human capital function is non-linear: Workers catch up to more knowledgeable coworkers, but are not dragged down by less knowledgeable ones. The market equilibrium features a pattern of sorting of coworkers across teams that is inefficiently positive. This inefficiency results in low human capital individuals having too few chances to learn from more knowledgeable coworkers and, in turn, in a stock of human capital and a flow of output that are inefficiently low.

Authors: 
Kyle Herkenhoff, University of Minnesota
Jeremy Lise, University College London
Guido Menzio, University of Pennsylvania
Gordon Phillips, Dartmouth College Tuck School of Business
Publication Date: 
November, 2018
HCEO Working Groups: 
Publication Status: 
Document Number: 
2018-088
File Description: 
First version, October, 2018