Polarizing Corporations: Does Talent Flow to "Good" Firms?
We conduct a field experiment in partnership with the largest job platform in Brazil to study how environmental, social, and governance (ESG) practices of firms affect talent allocation. We find both an average job-seeker’s preference for ESG and a large degree of heterogeneity across sociodemographic groups, with the strongest preference displayed by highly educated, white, and politically liberal individuals. We combine our experimental estimates with matched employer-employee administrative microdata and estimate an equilibrium model of the labor market. Counterfactual analyses suggest ESG practices increase labor market efficiency and worker welfare, while increasing the wage gap between skilled and unskilled workers.
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