A formal test of assortative matching in the labor market
By: John M. Abowd ... [et al.].
Contributors: National Bureau of Economic Research.
Series: NBER working paper series -- working paper  15546; Working paper series (National Bureau of Economic Research : Online) -- working paper no.  15546.
Publisher: National Bureau of Economic Research
Published: 2009
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "We estimate a structural model of job assignment in the presence of coordination frictions due to Shimer (2005). The coordination friction model places restrictions on the joint distribution of worker and firm effects from a linear decomposition of log labor earnings. These restrictions permit estimation of the unobservable ability and productivity differences between workers and their employers as well as the way workers sort into jobs on the basis of these unobservable factors. The estimation is performed on matched employer-employee data from the LEHD program of the U.S. Census Bureau. The estimated correlation between worker and firm effects from the earnings decomposition is close to zero, a finding that is often interpreted as evidence that there is no sorting by comparative advantage in the labor market. Our estimates suggest that this finding actually results from a lack of sufficient heterogeneity in the workforce and available jobs. Workers do sort into jobs on the basis of productive differences, but the effects of sorting are not visible because of the composition of workers and employers.     This paper is available as PDF (1303 K) or via email.      "--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 12/1/2009.

Includes bibliographical references.

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Mode of access: World Wide Web.