 Sorting in the Labor MarketAnnual Review of Economics, 2018, vol. 10, issue 1, 1-29 Abstract: This review surveys the literature on sorting in the labor market. There are inherent differences in worker ability and across-firm productivity. Two fundamental questions are whether the exact composition of skills of workers and productivity of firms affects output and how this composition determines the equilibrium allocation of workers within a firm and between firms. There has been a surge of research investigating the causes and consequences of the process of allocation of heterogeneous workers to firms. The focus in this review is on theory that sheds light on open questions in macroeconomics, labor, and industrial organization, with a particular emphasis on the role of firm size. Those models allow us to infer from the observed sorting patterns (who matches with whom) what the underlying technological determinants are and how they have evolved in recent decades. Furthermore, they help us understand the technological origins of important labor market trends, such as the increase in wage inequality and the change in labor market and firm dynamics. Keywords: assortative matching; complementarities; firm size distribution; inequality; labor markets; sorting; supermodularity; unemployment; wages (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:anr:reveco:v:10:y:2018:p:1-29 Ordering information: This journal article can be ordered from Access Statistics for this article More articles in Annual Review of Economics from Annual Reviews Annual Reviews 4139 El Camino Way Palo Alto, CA 94306, USA. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.