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Abstract:
We study the impact of social ties and publicly observable performance signals on the mobility of knowledge workers. In our empirical setting we exploit the fall of the Iron Curtain as a natural experiment for the migration decision of East German inventors. We identify 21,935 East German Inventors via their patenting track records prior to 1990 and social security records in the pan-German labor market. By modeling their mobility decision after 1989, we find that West regions with more pronounced social ties attracted more inventors. However, inventors with better performance indicators prior to 1990 are substantially less dependent on these social ties for their migration decision. We find additional evidence that the same group of inventors manage to enter regional labor markets that fit significantly better to their origin region in East Germany. We conclude that social ties support labor market access while visible labor market signals reduce the dependence on these ties
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