Matching bias in labor demand estimation
Using a matched firm-worker dataset, we show both theoretically and empirically that positive assortative matching between firms and workers leads to an underestimation of the absolute value of wage elasticity of labor demand.
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- Hamermesh, Daniel S., 1987. "The demand for labor in the long run," Handbook of Labor Economics,in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 8, pages 429-471 Elsevier.
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- Giovanna Aguilar & Silvio Rendon, 2007. "Employment and deadweight loss effects of observed non-wage labor costs," Documentos de Trabajo / Working Papers 2007-259, Departamento de Economía - Pontificia Universidad Católica del Perú.
- Aguilar, Giovanna & Rendon, Silvio, 2007. "Employment and Deadweight Loss Effects of Observed Non-Wage Labor Costs," IZA Discussion Papers 2856, Institute for the Study of Labor (IZA).