All Together Now: Leveraging Firms to Increase Worker Productivity Growth

Nathaniel Hilger

NBER Working Paper No. 23905
Issued in October 2017
NBER Program(s):Economics of Education, Labor Studies, Public Economics

I describe a new policy that endows firms with limited-duration, virtual shares in their own workers’ future realized earnings growth. The policy seeks to leverage employers to address a key challenge of the modern world: increasing worker skills well into adulthood. I label the policy “generalized experience rating” (GER) because it builds on the more narrow experience rating long embodied in the US unemployment insurance system. GER can be interpreted as a Pigouvian tax, and as a mandate alleviating an adverse selection problem. I discuss many design issues and potential unintended consequences. I conclude the policy may warrant further research.

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Document Object Identifier (DOI): 10.3386/w23905

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