Identifying Sorting in Practice

American Economic Journal: Applied Economics

44 Pages Posted: 8 Apr 2019

See all articles by Cristian Bartolucci

Cristian Bartolucci

University of Turin - Collegio Carlo Alberto

Francesco Devicienti

University of Turin - Collegio Carlo Alberto; University of Turin - Department of Economics and Financial Sciences G. Prato

Ignacio Monzón

University of Turin - Collegio Carlo Alberto

Multiple version iconThere are 2 versions of this paper

Date Written: March 24, 2018

Abstract

We propose a novel methodology to uncover the sorting pattern in labor markets. We identify the strength of sorting solely from a ranking of firms by profits. To discern the sign of sorting, we build a noisy ranking of workers from wage data. Our test for the sign of sorting is consistent even with noisy worker rankings. We apply our approach to a panel dataset that combines social security earnings records with detailed financial data for firms in the Veneto region of Italy. We find robust evidence of positive sorting. The correlation between worker and firm types is about 52%.

Keywords: assortative matching, worker mobility, profits, matched employer-employee data

JEL Classification: J6, J31, L2

Suggested Citation

Bartolucci, Cristian and Devicienti, Francesco and Monzón, Ignacio, Identifying Sorting in Practice (March 24, 2018). American Economic Journal: Applied Economics. Available at SSRN: https://ssrn.com/abstract=3174245

Cristian Bartolucci

University of Turin - Collegio Carlo Alberto ( email )

via Real Collegio 30
Moncalieri, Torino 10024
Italy

Francesco Devicienti

University of Turin - Collegio Carlo Alberto ( email )

via Real Collegio 30
Moncalieri, Torino 10024
Italy

University of Turin - Department of Economics and Financial Sciences G. Prato ( email )

C. so Unione Sovietica, 218 Bis
Torino, 13820-4020
Italy

Ignacio Monzón (Contact Author)

University of Turin - Collegio Carlo Alberto ( email )

Piazza Vincenzo Arbarello, 8
Torino, 10122
Italy

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