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Sorting Between and Within Industries: A Testable Model of Assortative Matching

John M. Abowd, Francis Kramarz, Sébastien Pérez-Duarte, Ian M. Schmutte
2018 Annals of Economics and Statistics  
Sorting Between and Within Industries: A Testable Model of Assortative Matching * 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
more » ... nt 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. JEL Classification: J30
doi:10.15609/annaeconstat2009.129.0001 fatcat:clme4sk3urbdpn7zv53zwfk3re