Identifying Sorting in Practice

Cristian Bartolucci, Francesco Devicienti () and Ignacio Monzon

No 9411, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We propose a novel methodology to uncover the sorting pattern in the labor market. Our methodology exploits the additional information contained in profits, which complements the information from wages and transitions typically used in previous work. We identify the strength of sorting solely from a ranking of firms by profits. To discern the sign of sorting, we build a noisy ranking of workers from wage data. We provide a test for the sign of sorting that is consistent even with noise in worker rankings. We apply our approach to a panel data set that combines social security earnings records for workers in the Veneto region of Italy with detailed financial data for firms. We find robust evidence of positive sorting. The correlation between worker and firm types is about 52%.

Keywords: profits; worker mobility; assortative matching; matched employer-employee data (search for similar items in EconPapers)
JEL-codes: J31 J6 L2 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2015-10
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (15)

Published - published in. American Economic Journal: Applied Economics, 2018, 10 (4), 408 - 438

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Related works:
Journal Article: Identifying Sorting in Practice (2018)
Working Paper: Identifying Sorting in Practice (2015)
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