Admission Price: This event is free to attend
Speaker: Dr Giacinta Cestone (Cass Business School)
Series: Department of Economics Seminar Series 2016-17
This seminar is part of the Department of Economics Seminar Series 2016-17. The seminars are open to all - no registration necessary.
We investigate how Internal Labour Markets (ILMs) allow organisations to accommodate shocks calling for costly labour adjustments. Using data on workers’ mobility within French business groups, we find that adverse shocks affecting affiliated firms boost the proportion of workers redeployed to other group units rather than external firms. This effect is stronger when labour regulations are stricter and destination-firms are more efficient or enjoy better growth opportunities. Affiliated firms hit by positive shocks rely on the ILM for new hires, especially high-skilled workers. Overall, ILMs emerge as a co-insurance mechanism within organisations, providing job stability to employees as a by-product.