EconPapers    
Economics at your fingertips  
 

High Wage Workers Match with High Wage Firms: Clear Evidence of the Effects of Limited Mobility Bias

Martyn J. Andrews (martyn.andrews@manchester.ac.uk), Leonard Gill (leonard.gill@manchester.ac.uk), Thorsten Schank and Richard Upward
Additional contact information
Martyn J. Andrews: University of Manchester
Leonard Gill: University of Manchester

No 6662, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Positive assortative matching implies that high productivity workers and firms match together. However, there is almost no evidence of a positive correlation between the worker and firm contributions in two-way fixed-effects wage equations. This could be the result of a bias caused by standard estimation error. Using German social security records we show that the effect of this bias is substantial in samples with limited inter-firm movement. The correlation between worker and firm contributions to wage equations is unambiguously positive.

Keywords: fixed effects; linked employer-employee panel data; limited mobility bias (search for similar items in EconPapers)
JEL-codes: C23 J20 J30 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2012-06
New Economics Papers: this item is included in nep-bec, nep-eff, nep-lab and nep-lma
References: Add references at CitEc
Citations: View citations in EconPapers (73)

Published - published in: Economics Letters, 2012, 117 (3), 824-827

Downloads: (external link)
https://docs.iza.org/dp6662.pdf (application/pdf)

Related works:
Journal Article: High wage workers match with high wage firms: Clear evidence of the effects of limited mobility bias (2012) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp6662

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
library@iza.org

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte (hinte@iza.org).

 
Page updated 2025-01-03
Handle: RePEc:iza:izadps:dp6662