An empirical assessment of assortative matching in the labor market

Rute Mendes, Gerard J. van den Berg and Maarten Lindeboom
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Rute Mendes: Free University Amsterdam, Department of Economics, Postal: De Boelelaan 1105, 1081 HV Amsterdam, The Netherlands
Maarten Lindeboom: Free University Amsterdam, Department of Economics, Postal: De Boelelaan 1105, 1081 HV Amsterdam, The Netherlands

No 2007:30, Working Paper Series from IFAU - Institute for Labour Market Policy Evaluation

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-emplyee 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: D24 J21 J24 J63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec and nep-lab
Date: 2007-11-30
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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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