This paper harmonizes individual-level data on labor supply for 54 countries to document how firm size and the skill intensity of employment by firm size vary across countries. First, it finds that the share of employment in large firms in high-income countries is more than three times larger than in low-income countries. Second, it shows that across countries, employees of large firms are more skilled than those of small firms. Third, it documents that lower skill endowments in low-income countries affect employment in firms of different sizes asymmetrically: the skill intensity of employment is much lower in small firms in low-income countries than in high-income countries, but only slightly lower in large firms. This evidence suggests that large firms rely particularly strongly on employing high-skill workers, so that the low skill endowment of low-income countries limits the size of firms in these countries.
DETAILS
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Skill Supply, Firm Size, and Economic Development
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6/3/2024 03:48:00 PM
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6/3/2024 03:48:00 PM
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Charles Gottlieb,Markus Poschke,Michael Tueting
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Working Paper (WP)
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English
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World
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This paper harmonizes individual-level data on labor supply for 54 countries to document how firm size and the skill intensity of employment by firm size vary across countries. First, it finds that the share of employment in large firms in high-income countries is more than three times larger than in low-income countries. Second, it shows that across countries, employees of large firms are more skilled than those of small firms. Third, it documents that lower skill endowments in low-income countries affect employment in firms of different sizes asymmetrically: the skill intensity of employment is much lower in small firms in low-income countries than in high-income countries, but only slightly lower in large firms. This evidence suggests that large firms rely particularly strongly on employing high-skill workers, so that the low skill endowment of low-income countries limits the size of firms in these countries.
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