Working Paper: CEPR ID: DP10130
Authors: John M. Abowd; Francis Kramarz; Sebastien Perez-Duarte; Ian M. Schmutte
Abstract: We test for sorting of workers between and within industrial sectors in a directed search model with coordination frictions. We fit the model to sector-specific vacancy and output data along with publicly-available statistics that characterize the distribution of worker and employer wage heterogeneity across sectors. Our empirical method is general and can be applied to a broad class of assignment models. The results indicate that industries are the loci of sorting - more productive workers are employed in more productive industries. The evidence confirms assortative matching can be present even when worker and employer components of wage heterogeneity are weakly correlated.
Keywords: industries; sorting
JEL Codes: J30
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| more productive workers (J29) | more productive industries (O49) |
| worker productivity characteristics (J29) | sorting of workers into firms (J29) |
| employer productivity characteristics (J29) | sorting of workers into firms (J29) |
| sorting process (C69) | productivity outcomes (O49) |
| coordination frictions (F12) | matching process (C78) |
| assortative matching (C78) | sorting of workers into firms (J29) |