Mendes, Rute (Free University Amsterdam, Department of Economics) van den Berg, Gerard J () (Free University Amsterdam, Department of Economics) Lindeboom, Maarten (Free University Amsterdam, Department of Economics)
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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.
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Paper provided by IFAU - Institute for Labour Market Policy Evaluation in its series Working Paper Series with number
2007:30.
Length: 30 pages Date of creation: 30 Nov 2007 Date of revision: Handle: RePEc:hhs:ifauwp:2007_030
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Find related papers by JEL classification: D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs
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