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JAQ of All Trades: Job Mismatch, Firm Productivity and Managerial Quality

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Abstract

We present a novel measure of job-worker allocation quality (JAQ) by exploiting employer-employee data with machine learning techniques and validate it in various ways. Our measure correlates positively with earnings and negatively with separations over individual workers’ careers. At firm level, it increases with competition, non-family firm status, workers’ human capital and has a robust correlation with productivity. The quality of rank-and-file workers’ job matches responds positively to improvements in management quality. JAQ can be constructed for any employer-employee data including workers’ occupations, and used to explore research questions in organization and labor economics, as well as in corporate finance.

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  • Coraggio, Luca & Pagano, Marco & Scognamiglio, Annalisa & Tåg, Joacim, 2022. "JAQ of All Trades: Job Mismatch, Firm Productivity and Managerial Quality," Working Paper Series 1427, Research Institute of Industrial Economics, revised 25 Apr 2023.
    • Handle: RePEc:hhs:iuiwop:1427
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    More about this item

    Keywords

    Jobs; Workers; Matching; Mismatch; Machine Learning; Productivity; Management;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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