The Assignment of Workers to Jobs in an Economy with Coordination Frictions

Shimer, Robert

doi:10.1086/444551

“…The wage data approach is very flexible and takes account of a wide range of endogeneity issues. However, assignment models with coordination frictions and PAM, like the Shimer (2005) model, can generate positive or negative correlation between the firm and person effects as obtained from a wage equation. This calls for the analysis of productivity data.…”

Section: Introductionmentioning

confidence: 99%

An empirical assessment of assortative matching in the labor market

Mendes

¹

,

Berg

²

,

Lindeboom

³

2010

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in An Empirical Assessment of Assortative Matching in the Labor MarketRute Mendes Gerard J. van den Berg Maarten Lindeboom The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. 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. JEL Classification:J21, J24, D24, J63

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“…Shimer (2005) using a theoretical model finds that in labor markets with heterogeneous workers and jobs, wages and job productivity are associated, and that firms can maximize profits through increased employee productivity. Jackson (2010) finds that teachers who are better matched to schools and topics have higher output performance even after controlling for student characteristics.…”

Section: Related Literaturementioning

confidence: 99%

Quality Employment and Firm Performance Evidence from Indian Firm-Level Data

Amoranto

¹

,

Chun

²

2011

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The views expressed in this paper are those of the author(s) and do not necessarily reflect the views or policies of the Asian Development Bank. Terms of use: Documents inThe ADB Economics Working Paper Series is a forum for stimulating discussion and eliciting feedback on ongoing and recently completed research and policy studies undertaken by the Asian Development Bank (ADB) staff, consultants, or resource persons. The series deals with key economic and development problems, particularly those facing the Asia and Pacific region; as well as conceptual, analytical, or methodological issues relating to project/program economic analysis, and statistical data and measurement. The series aims to enhance the knowledge on Asia's development and policy challenges; strengthen analytical rigor and quality of ADB's country partnership strategies, and its subregional and country operations; and improve the quality and availability of statistical data and development indicators for monitoring development effectiveness.

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“…The earlier competitive search literature instead focuses solely on search and matching frictions (e.g. see Montgomery (1991), Peters (1991Peters ( , 1997Peters ( , 2000, Moen (1997), Shimer (1996Shimer ( ,2005, Acemoglu andShimer (1999a, 1999b), Burdett, Shi, and Wright (2001), Shi (2001), and Mortensen and Wright (2002)). In competitive search models of the labor market, rms typically compete ex ante by publicly posting (and committing to) job o ers, and workers then direct their search to the more attractive o ers.…”

Section: Introductionmentioning

confidence: 99%

“…In particular, Shi (2001), Shimer (2005, Eeckhout and Kircher (2010) allow for two-sided one-dimensional heterogeneity.…”

Section: Introductionmentioning

confidence: 99%

Competitive search equilibrium with multidimensional heterogeneity and two-sided ex-ante investments

Jerez

¹

2017

Journal of Economic Theory

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We analyze a competitive search environment where heterogeneous workers and firms make costly investments (e.g. in education and physical capital, respectively) before they enter the labor market. A key novelty with respect to existing work is that we allow for multidimensional heterogeneity on both sides of the market. Our environment features transferable utility and symmetric information. As in classical hedonic models, wages depend both on the job's and on the worker's match-relevant characteristics. Yet the presence of search frictions implies that (unlike in those models) markets do not clear. The hedonic wage function and probabilities of finding and filling different jobs are determined endogenously in a competitive search equilibrium. We show that constrained efficient allocations can be determined as optimal solutions to a linear programming problem, whereas the wage function supporting these allocations and associated expected payoffs for workers and firms correspond to the solutions of the `dual' of that linear program. We use this characterization to show that a competitive search equilibrium exist and is constrained efficient under very general conditions. Jerez (2014) makes a similar point in the context of a model where all the match-relevant characteristics of the traders are exogenous. Here we extend the analysis to allow for two-sided ex-ante investments which are potentially multidimensional. The fact that linear programming techniques have been used for the structural estimation of frictionless matching models suggests that our framework is potentially useful for empirical studies of labor markets and other hedonic markets (like that for housing) where search frictions are prevalent Journal of Economic Literature Classification Numbers: D50, D61, D83.

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The Assignment of Workers to Jobs in an Economy with Coordination Frictions

Cited by 236 publications

References 30 publications

An empirical assessment of assortative matching in the labor market

An empirical assessment of assortative matching in the labor market

Quality Employment and Firm Performance Evidence from Indian Firm-Level Data

Competitive search equilibrium with multidimensional heterogeneity and two-sided ex-ante investments

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