High wage workers match with high wage firms: Clear evidence of the effects of limited mobility bias

Arbeitspapier

Positive assortative matching implies that high productivity workers and firms match together. However, there is almost no evidence of a positive correlation between the worker and firm contributions in two-way fixed-effects wage equations. This could be the result of a bias caused by standard estimation error. Using German social security records we show that the effect of this bias is substantial in samples with limited inter-firm movement. The correlation between worker and firm contributions to wage equations is unambiguously positive.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 6662

Classification and Topics

• Classification: Wirtschaft ; Demand and Supply of Labor: General ; Wages, Compensation, and Labor Costs: General ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models
• Subject: linked employer-employee panel data ; fixed effects ; limited mobility bias ; Lohnkurve ; Arbeitskräfte ; Arbeitsproduktivität ; Unternehmen ; Produktivität ; Matching ; Arbeitsmobilität ; Bias ; Schätzung ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Andrews, Martyn J. ; Gill, Leonard ; Schank, Thorsten ; Upward, Richard
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/62404
• Last update: 10.03.2025, 11:43 AM CET