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The spatial sorting and matching of skills and firms

Author

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  • Giordano Mion
  • Paolo Naticchioni

Abstract

In this paper we make use of a matched employer‐employee database for Italy to look at the spatial distribution of wages. Using this rich database we aim to open up the black box of agglomeration economies exploiting the micro dimension of interaction among economic agents, both individuals and firms. We provide evidence that firm size and, especially, skills are sorted across space and account for a large portion of the spatial wage variation. Our data also support the assortative matching hypothesis, which we show not to be driven by co‐location of good workers and firms. Finally, we point out that assortative matching is negatively related to local market size. Dans ce texte, les auteurs utilisent des données italiennes qui apparient employeurs et employés pour étudier la répartition spatiale des salaires. Ils visent à faire la lumière sur les économies d'agglomération en sondant les interactions au niveau micro entre les agents économiques – individus et entreprises. Les résultats montrent que la taille des firmes et les compétences se déploient différemment dans l'espace et que ces variations expliquent une bonne portion de la variation spatiale des salaires. Les données supportent l'hypothèse d'un arrimage des compétences avec la taille des firmes dont on montre qu'il n'est pas engendré par la co‐localisation des meilleurs travailleurs et firmes. Finalement, on montre que l'arrimage est inversement co‐relié avec la taille du marché local.

Suggested Citation

  • Giordano Mion & Paolo Naticchioni, 2009. "The spatial sorting and matching of skills and firms," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 42(1), pages 28-55, February.
  • Handle: RePEc:wly:canjec:v:42:y:2009:i:1:p:28-55
    DOI: 10.1111/j.1540-5982.2008.01498.x
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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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