Sorting Within and Across French Production Hierarchies

Grigorios Spanos ()
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Grigorios Spanos: Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS, http://www.amse-aixmarseille.fr/en/users/spanos

No 1524, AMSE Working Papers from Aix-Marseille School of Economics, France

Abstract: The objective of this paper is to examine the assignment of workers to layers and firms. In particular, I use an administrative dataset of French workers to study the organization of firms. First, I test whether higher ability workers are employed in the higher layers of firms. Second, I test whether there is positive assortative matching between workers in the different layers of firms. Third, I test whether higher ability workers allow their managers to increase their span of control and employ larger teams. To do this, I first classify employees as residing in different organizational layers such as production and administrative workers, supervisors, senior managers, and owners and CEOs, using occupational codes. From a panel wage regression I then obtain estimates of workers’ ability as in Abowd et al. (1999). I then study how workers sort into layers and across layers with other workers. I emphasize three results. First, higher ability workers are employed in the higher layers of firms. Second, I find evidence of positive assortative matching between workers in the different layers of firms. Third, I find different mechanisms are behind the sorting pattern observed in the data. I find evidence that higher ability workers limit their managers’ span of control, and I also find weak evidence that higher ability workers allow their managers to increase their span of control and employ larger teams.

Keywords: positive assortative matching; firm organization; matched employer-employee data; high-dimensional fixed effects (search for similar items in EconPapers)
Pages: 53 pages
Date: 2015-06-15
New Economics Papers: this item is included in nep-bec and nep-hrm
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Persistent link: https://EconPapers.repec.org/RePEc:aim:wpaimx:1524

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