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Matching Bias in Labor Demand Estimation

Author

Listed:
  • Aguilar, Giovanna

    () (Universidad Católica del Perú)

  • Rendon, Silvio

    () (Stony Brook University)

Abstract

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.

Suggested Citation

  • Aguilar, Giovanna & Rendon, Silvio, 2007. "Matching Bias in Labor Demand Estimation," IZA Discussion Papers 3076, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp3076
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    References listed on IDEAS

    as
    1. 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.
    2. Giovanna Aguilar & Sílvio Rendon, 2010. "Employment And Deadweight Loss Effects Of Observed Nonwage Labor Costs," Economic Inquiry, Western Economic Association International, vol. 48(3), pages 793-809, July.
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    Cited by:

    1. Lichter, Andreas & Peichl, Andreas & Siegloch, Sebastian, 2015. "The own-wage elasticity of labor demand: A meta-regression analysis," European Economic Review, Elsevier, vol. 80(C), pages 94-119.
    2. Reyna, Debora & Céspedes, Nikita, 2016. "La Oferta Laboral en Perú," Working Papers 2016-017, Banco Central de Reserva del Perú.

    More about this item

    Keywords

    labor demand estimation; employment; matching;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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