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High wage workers match with high wage firms: Clear evidence of the effects of limited mobility bias

  • Andrews, M.J.
  • Gill, L.
  • Schank, T.
  • Upward, R.

Limited Mobility Bias explains why positive assortative matching is not observed in the empirical literature. Using German social security records, we estimate the correlation between worker and firm contributions to wage equations and find that it is unambiguously positive.

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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 117 (2012)
Issue (Month): 3 ()
Pages: 824-827

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Handle: RePEc:eee:ecolet:v:117:y:2012:i:3:p:824-827
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

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  1. Amine Ouazad, 2008. "A2REG: Stata module to estimate models with two fixed effects," Statistical Software Components S456942, Boston College Department of Economics.
  2. John Abowd & Francis Kramarz & Sebastien Perez-Duarte & Ian Schmutte, 2009. "A Formal Test of Assortative Matching in the Labor Market," Working Papers 09-40, Center for Economic Studies, U.S. Census Bureau.
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  4. Philipp Kircher & Jan Eeckhout, 2009. "Identifying Sorting, In Theory," 2009 Meeting Papers 581, Society for Economic Dynamics.
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  9. M. J. Andrews & L. Gill & T. Schank & R. Upward, 2008. "High wage workers and low wage firms: negative assortative matching or limited mobility bias?," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 171(3), pages 673-697.
  10. Goux, Dominique & Maurin, Eric, 1999. "Persistence of Interindustry Wage Differentials: A Reexamination Using Matched Worker-Firm Panel Data," Journal of Labor Economics, University of Chicago Press, vol. 17(3), pages 492-533, July.
  11. Simon D. Woodcock, 2007. "Match Effects," Discussion Papers dp07-13, Department of Economics, Simon Fraser University.
  12. John M. Abowd (corresponding) & Francis Kramarz, 2004. "Are Good Workers Employed by Good Firms? A Simple Test of Positive Assortative Matching Models," Econometric Society 2004 North American Winter Meetings 385, Econometric Society.
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  17. Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-46, July-Aug..
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