Endogenous Decisions on Acceptable Worker-Job Mismatch Level and the Impact on Workers’ Performance

30 Pages Posted: 9 Nov 2020 Last revised: 23 Aug 2021

See all articles by Izumi Yokoyama

Izumi Yokoyama

Hitotsubashi University

Takuya Obara

Tohoku Gakuin University

Kazuma Edamura

Kanagawa University

Arisa Shichijo

Johns Hopkins Bloomberg School of Public Health

Tomohiko Inui

Gakushuin University

Date Written: September 19, 2020

Abstract

This study examines this endogeneity of worker's acceptable level of mismatch and its impact on workers' performance. First, we construct a theoretical model that depicts the tendency of a potential worker to take a job offer if the firm is ``attractive'' for some reason form them, even when he or she knows that their personality does not align with the firm's characteristics. According to this model, a strong tendency for this behavior yields a positive relationship between a worker's acceptable mismatch level and the firm's attractive characteristics. Next, using this relationship, we run an instrumental variable (IV) estimation to overcome the endogeneity to regress the impact of mismatches on workers' performance. The IV estimation confirms that a higher level of mismatch lowers workers' performance significantly. The main results imply that ``attractive'' firms are more likely to suffer from decreased productivity as a result of mismatches given the positive relationship between workers' acceptable mismatch levels and the firm's attractive characteristics. Since ``attractive'' firms tend to be generally large firms with a major influence on the economy, the lowered performance due to these mismatches can hinder economic strength and hamper national growth. Thus, it is essential for this issue to be resolved in a timely manner to avoid further losses.

Keywords: Mismatch; Workers’ Performance; Firms’ Characteristics; Participation Constraint; Instrumental Variable

JEL Classification: D22; J22; J24; M51

Suggested Citation

Yokoyama, Izumi and Obara, Takuya and Edamura, Kazuma and Shichijo, Arisa and Inui, Tomohiko, Endogenous Decisions on Acceptable Worker-Job Mismatch Level and the Impact on Workers’ Performance (September 19, 2020). Available at SSRN: https://ssrn.com/abstract=3695573 or http://dx.doi.org/10.2139/ssrn.3695573

Izumi Yokoyama (Contact Author)

Hitotsubashi University ( email )

2-1 Naka
Kunitachi
Tokyo 186-8601
Japan

HOME PAGE: http://sites.google.com/r.hit-u.ac.jp/izumi-yokoyama/

Takuya Obara

Tohoku Gakuin University ( email )

1-3-1 Tsuchitoi Aoba-ku
Sendai, 980-8511
Japan

Kazuma Edamura

Kanagawa University ( email )

Yokohama
Japan

Arisa Shichijo

Johns Hopkins Bloomberg School of Public Health ( email )

615 North Wolfe Street
Baltimore, MD 21205
United States

Tomohiko Inui

Gakushuin University ( email )

1-5-1 Mejiro
Toshima-ku Tokyo 171-8588
United States

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