An Empirical Assessment of Assortative Matching in the Labor Market

Rute Mendes, Gerard J. van den Berg and Maarten Lindeboom

No 62, Carlo Alberto Notebooks from Collegio Carlo Alberto

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: positive assortative matching; matched employer-employee data; productivity; skill; unobserved heterogeneity; sorting; fixed effects. (search for similar items in EconPapers)
JEL-codes: J21 J24 D24 J63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab
Date: 2007
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Related works:
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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Persistent link: http://EconPapers.repec.org/RePEc:cca:wpaper:62

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