NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

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

John M. Abowd, Francis Kramarz, Sébastien Pérez-Duarte, Ian M. Schmutte

NBER Working Paper No. 20472
Issued in September 2014
NBER Program(s):   LS

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.

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Document Object Identifier (DOI): 10.3386/w20472

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