Alexandra Roulet - The Human Side of Productivity - GFP Conference, Venice, 8th July 2021

The Human Side of Productivity: Uncovering the role of skills and diversity for the productivity of firms Discussion by Alexandra Roulet INSEAD

July 8th, 2021

Summary I Firms in the same country, detailed industry and size categories vary greatly in terms of their value added per worker.

I This report quantifies that one third of the gap between firms at the top and median firms can be explained by ”human factors”, most notably differences in the skill composition of the workforce and in the cultural diversity of the pool of managers.

I It therefore advocates for three complementary policies I improving the supply of a skilled workforce through education; I upskilling managers through management training and lifelong learning I mobilising a broader pool of talent through telework and well designed immigration policies

Major strengths: the research question and the data

I Unveiling the characteristics of people employed at firms with the highest VA per worker is clearly of first-order importance.

I Combining data on firms outcomes and skills and diversity of the workforce for almost all firms of several countries is a key contribution

Discussion points 1. How should we interpret within industry differences across firms in VA per Worker?

I Link with the misallocation literature (e.g. Hsieh & Klenow, 2009; Ruzic, 2021)

2. Reverse causality: is it because they have a great pool of workers that top firms are at the frontier or because they are at the frontier, for other reasons, that they are able to attract a skilled and diverse workforce?

3. Upskilling the labor force is conceptually appealing but complicated in practice I German example which makes a better use of medium skills is interesting I The focus on specific skills (ICT and management and communication) can be promising as well I So is remote work as a way to mobilize a new pool of talent