An Empirical Assessment of Assortative Matching in the Labor Market

Rute Mendes, Gerard van den Berg and Maarten Lindeboom ()

No 3053, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In labor markets with worker and firm heterogeneity, the matching between firms and workers may be assortative, meaning that the most productive workers and firms team up. We investigate this with longitudinal population-wide matched employer-employee data from Portugal. Using dynamic panel data methods, we quantify a firm-specific productivity term for each firm, and we relate this to the skill distribution of workers in the firm. We find that there is positive assortative matching, in particular among long-lived firms. Using skill-specific estimates of an index of search frictions, we find that the results can only to a small extent be explained by heterogeneity of search frictions across worker skill groups.

Keywords: fixed effects; unobserved heterogeneity; sorting; skill; positive assortative matching; matched employer-employee data; productivity (search for similar items in EconPapers)
JEL-codes: D24 J21 J24 J63 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2007-09
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (12)

Published - published in: Labour Economics, 2010, 17 (6), 919-929

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Related works:
Journal Article: An empirical assessment of assortative matching in the labor market (2010)
Working Paper: An Empirical Assessment of Assortative Matching in the Labor Market (2007)
Working Paper: An empirical assessment of assortative matching in the labor market (2007)
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