Competence, Complementarity, and Career Choice
AbstractWe build a tractable assignment model to identify the degree of complemen- tarity between attributes of firms and managers in production. Managers learn about their own type by observing a sequence of public signals. Each period, the sorting of firms and managers is ex ante perfectly assortative, but is generally not so ex post. We use a simulated method of moments to replicate empirical targets from a large matched employer-employee dataset covering the Danish la- bor force between 1999 and 2007. We exploit the non-monotonicity of executive compensation in the employer type to structurally estimate the degrees of com- plementarity in the production function. Our results fill an important gap in the literature on the aggregate effects of mismatch that was previously highlighted in Alder (2011).
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Bibliographic InfoPaper provided by Society for Economic Dynamics in its series 2012 Meeting Papers with number 1084.
Date of creation: 2012
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Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
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