Assortative labor matching, city size, and the education level of workers

Stefan Leknes (), Jorn Rattso and Hildegunn Stokke

Regional Science and Urban Economics, 2022, vol. 96, issue C

Abstract: We investigate the heterogeneity of assortative labor matching with respect to geography, skills, and tasks. Our contribution is to separate plant quality by education level and occupation tasks using the AKM-model. We introduce a geology-related instrument to analyze the city effect and address limited mobility bias. Using rich administrative worker-plant dataset for Norway, we show that matching of the college educated have a strong city effect. The IV estimates indicate that a doubling of city size increases the correlation between worker and plant quality by 9 percentage points. A wage decomposition shows that matching accounts for 22% of the urban wage premium adjusted for sorting. In terms of occupations, better matching in cities is observed only for non-routine abstract tasks.

Keywords: Assortative matching; Education-specific plant fixed effects; City size; Limited mobility bias; Tasks; Register data (search for similar items in EconPapers)
JEL-codes: J24 J31 R23 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: Assortative labor matching, city size, and the education level of workers (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:96:y:2022:i:c:s0166046222000461

DOI: 10.1016/j.regsciurbeco.2022.103806

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