Knowledge Spillovers, Competition, and Individual Careers

Abstract

Exposure to better peers in the workplace can influence career trajectories through two opposing channels: positively, via knowledge spillovers, and negatively, through competition for advancement. We disentangle these effects by studying untrained labor market entrants and distinguishing between coworkers in the same occupation with whom they are likely to compete versus those with whom they are unlikely to compete. We find robust evidence of persistent knowledge spillovers but also identify countervailing competition effects of comparable magnitude. Both effects are more pronounced for men than for women.