An empirical assessment of assortative matching in the labor market

Rute Mendes*, Gerard J. van den Berg, Maarten Lindeboom

*Corresponding author for this work

Research output: Contribution to journalArticle (Academic Journal)peer-review

24 Citations (Scopus)

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 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.

Original languageEnglish
Pages (from-to)919-929
Number of pages11
JournalLabour Economics
Volume17
Issue number6
DOIs
Publication statusPublished - Dec 2010

Keywords

  • Fixed effects
  • Matched employer-employee data
  • Positive assortative matching
  • Productivity
  • Search frictions
  • Skill
  • Sorting
  • Unobserved heterogeneity

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