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Mismatch of Talent Evidence on Match Quality, Entry Wages, and Job Mobility

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  • Fredriksson, Peter

    (Stockholm University, UCLS, IZA, and IFAU)

  • Hensvik, Lena

    (Institute for Evaluation of Labour Market and Education Policy (IFAU), Uppsala Center for Labor Studies (UCLS), and CESifo)

  • Nordström Skans, Oskar

    (Uppsala University, UCLS, IFAU and IZA)

Abstract

We examine the direct impact of idiosyncratic match quality on entry wages and job mobility using unique data on worker talents matched to job-indicators and individual wages. Tenured workers are clustered in jobs with high job-specific returns to their types of talents. We therefore measure mismatch by how well the types of talents of recent hires correspond to the talents of tenured workers performing the same jobs. A stylized model shows that match quality has a smaller impact on entry wages but a larger impact on separations and future wage growth if matches are formed under limited information. Empirically, we find such patterns for inexperienced workers and workers who were hired from non-employment, which are also groups where mismatch is more pronounced on average. Most learning about job-specific mismatch happens within a year. Experienced job-to-job movers appear to match under much less uncertainty. They are better matched on entry and mismatch have a smaller eect on their initial separation rates and later wage growth. Instead, match quality is priced into their starting wages.

Suggested Citation

  • Fredriksson, Peter & Hensvik, Lena & Nordström Skans, Oskar, 2015. "Mismatch of Talent Evidence on Match Quality, Entry Wages, and Job Mobility," Research Papers in Economics 2015:10, Stockholm University, Department of Economics.
  • Handle: RePEc:hhs:sunrpe:2015_0010
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    Cited by:

    1. Hartog, Joop & Raposo, Pedro, 2017. "Are starting wages reduced by an insurance premium for preventing wage decline? Testing the prediction of Harris and Holmstrom (1982)," Labour Economics, Elsevier, vol. 48(C), pages 105-119.
    2. Wiljan van den Berge, 2019. "Automatic Reaction – What Happens to Workers at Firms that Automate?," CPB Discussion Paper 390.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    3. Elda Pema & Stephen Mehay & Simona Tick, 2017. "Noncognitive skills and job match: evidence from military applicants," Defence and Peace Economics, Taylor & Francis Journals, vol. 28(5), pages 511-533, September.
    4. Kampkötter, Patrick & Petters, Lea M. & Sliwka, Dirk, 2021. "Employee identification and wages – on the economics of “Affective Commitment”," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 608-626.
    5. Hensvik, Lena & Rosenqvist, Olof, 2015. "The strength of the weakest link: sickness absence, internal substitutability and worker-firm matching," Working Paper Series 2015:28, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    6. Wiljan van den Berge, 2019. "Automatic Reaction – What Happens to Workers at Firms that Automate?," CPB Discussion Paper 390, CPB Netherlands Bureau for Economic Policy Analysis.
    7. Kramarz, Francis & Nordström Skans, Oskar & Rosenqvist, Olof, 2019. "Skills, education and fertility -and the confounding impact of family background," Working Paper Series 2019:10, IFAU - Institute for Evaluation of Labour Market and Education Policy.

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    More about this item

    Keywords

    Matching; Job search; Comparative advantage; Employer learning;
    All these keywords.

    JEL classification:

    • 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
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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