Sorting when firms have size

Maxim Goryunov

No MWP 2017/09, Economics Working Papers from European University Institute

Abstract: In this paper, I study the sorting of workers to firms, when firm size is explicitly taken into account. I develop a method to non-parametrically identify the match production function from data on workers' wages and firms' revenues and posted job vacancies. Under the proposed identification procedure, ordering of workers and firms is identified independently, and can therefore be achieved using potentially different data sets. The model sheds light on the question of the exporter wage premium: exporters pay higher wages because they are larger, and higher wages are required to support a larger firm size.

Keywords: Matching; Sorting; Wage determination; Firm size (search for similar items in EconPapers)
JEL-codes: C78 E24 J31 L11 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-lma, nep-mac and nep-ore
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