Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/284324 
Year of Publication: 
2024
Series/Report no.: 
Working Paper No. 974
Publisher: 
Queen Mary University of London, School of Economics and Finance, London
Abstract: 
We present a model in which firms compete for workers who have a taste for a nonpecuniary job attribute, such as purpose, sustainability, ES/CSR, or working conditions. Firms can invest in flexible production technologies that allow them to create jobs with different levels of the desirable job attribute. In a competitive equilibrium, flexible firms become polarized and cater to workers with extreme preferences for the job attribute. Firm polarization increases with technological progress and industry concentration. More polarized sectors have higher profits, lower average wages, and a lower labor share of value added. Traditional investors prefer to buy shares in polarized sectors, while socially responsible investors prefer to invest in less polarized sectors. Firms in more polarized sectors are more valuable and have higher stock returns than firms in less polarized sectors.
Subjects: 
Labor Markets
Job Design
Compensating Differentials
Socially Responsible Investment
Polarization
Document Type: 
Working Paper

Files in This Item:
File
Size
508.52 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.