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Sorting when firms have size

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  • GORYUNOV, Maxim

Abstract

In this paper, I study the sorting of workers to firms, when firm size is explicitly taken into account. I develop a method to non-parametrically identify the match production function from data on workers' wages and firms' revenues and posted job vacancies. Under the proposed identification procedure, ordering of workers and firms is identified independently, and can therefore be achieved using potentially different data sets. The model sheds light on the question of the exporter wage premium: exporters pay higher wages because they are larger, and higher wages are required to support a larger firm size.

Suggested Citation

  • GORYUNOV, Maxim, 2017. "Sorting when firms have size," Economics Working Papers MWP 2017/09, European University Institute.
    • Handle: RePEc:eui:euiwps:mwp2017/09
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    References listed on IDEAS

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    More about this item

    Keywords

    Matching; Sorting; Wage determination; Firm size;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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