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An Empirical Assessment of Assortative Matching in the Labor Market

Author

Listed:
  • Mendes, Rute

    (University of Turin)

  • van den Berg, Gerard J.

    (University of Groningen)

  • Lindeboom, Maarten

    (Vrije Universiteit Amsterdam)

Abstract

In labor markets with worker and firm heterogeneity, the matching between firms and workers may be assortative, meaning that the most productive workers and firms team up. We investigate this with longitudinal population-wide matched employer-employee data from Portugal. Using dynamic panel data methods, we quantify a firm-specific productivity term for each firm, and we relate this to the skill distribution of workers in the firm. We find that there is positive assortative matching, in particular among long-lived firms. Using skill-specific estimates of an index of search frictions, we find that the results can only to a small extent be explained by heterogeneity of search frictions across worker skill groups.

Suggested Citation

  • Mendes, Rute & van den Berg, Gerard J. & Lindeboom, Maarten, 2007. "An Empirical Assessment of Assortative Matching in the Labor Market," IZA Discussion Papers 3053, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp3053
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    References listed on IDEAS

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    More about this item

    Keywords

    fixed effects; unobserved heterogeneity; sorting; skill; positive assortative matching; matched employer-employee data; productivity;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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