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The spatial sorting and matching of skills and firms

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Author Info
MION, Giordano
NATICCHIONI, Paolo

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Abstract

Using a matched employer-employee database for Italy we look at the spatial distribution of wages across provinces. This rich database allows us to contribute at opening the black box of agglomeration economies exploiting the micro dimension of the interaction among economic agents, both individuals and firms. We provide evidence that firm size and particularly skills are sorted across space, and explain a large portion of the spatial wage variation that could otherwise be attributed to aggregate proxies of agglomeration externalities. Our data further support the assortative matching hypothesis, that is'good' workers match on the labor market with 'good' firms, and we further show that assortative matching is not driven by a co-location of workers and firms of similar quality. Finally, we point out that this assortative matching is negatively related to local market size."

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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2006099.

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Date of creation: 01 Nov 2006
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Handle: RePEc:cor:louvco:2006099

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Related research
Keywords: Spatial externalities; panel-data; skills; ÞrmsÕ heterogeneity; sorting; matching;

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Find related papers by JEL classification:
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
R23 - Urban, Rural, and Regional Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
R30 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location - - - General

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  45. repec:rus:hseeco:122439 is not listed on IDEAS
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Kristian Behrens & Frédéric Robert-Nicoud, 2008. "Survival of the Fittest in Cities: Agglomeration, Selection, and Polarisation," CEP Discussion Papers dp0894, Centre for Economic Performance, LSE. [Downloadable!]
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