An Empirical Assessment of Assortative Matching in the Labor Market

32 Pages Posted: 23 Oct 2007

See all articles by Rute Mendes

Rute Mendes

University of Turin

Gerard J. van den Berg

VU University Amsterdam - Department of Economics; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; Tinbergen Institute

Maarten Lindeboom

Vrije Universiteit Amsterdam; Tinbergen Institute Amsterdam; IZA Institute of Labor Economics

Date Written: September 2007

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.

Keywords: positive assortative matching, matched employer-employee data, productivity, skill, unobserved heterogeneity, sorting, fixed effects

JEL Classification: J21, J24, D24, J63

Suggested Citation

Mendes, Rute and van den Berg, Gerard J. and Lindeboom, Maarten, An Empirical Assessment of Assortative Matching in the Labor Market (September 2007). IZA Discussion Paper No. 3053. Available at SSRN: https://ssrn.com/abstract=1022940

Rute Mendes

University of Turin ( email )

Via Po 53
Torino, Turin - Piedmont 10100
Italy

HOME PAGE: http://www.tinbergen.nl/~mendes/

Gerard J. Van den Berg (Contact Author)

VU University Amsterdam - Department of Economics ( email )

De Boelelaan 1105
1081 HV Amsterdam
Netherlands
+31 20 444 6132 (Phone)
+32 20 444 6020 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Tinbergen Institute

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Maarten Lindeboom

Vrije Universiteit Amsterdam ( email )

De Boelelaan 1105
1081 HV Amsterdam
Netherlands
+31 20 444 6033 (Phone)
+31 20 444 6020 (Fax)

Tinbergen Institute Amsterdam

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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