Working Paper Series
IFAU - Institute for Evaluation of Labour Market and Education Policy
Mismatch of talent: evidence on match quality, entry wages, and job mobility
(), Lena Hensvik
() and Oskar Nordström Skans
Abstract: We examine the direct impact of idiosyncratic match
quality on entry wages and job mobility using unique data on worker talents
matched to job-indicators and individual wages. Tenured workers are
clustered in jobs with high job-specific returns to their types of talents.
We therefore measure mismatch by how well the types of talents of recent
hires correspond to the talents of tenured workers performing the same
jobs. A stylized model shows that match quality has a smaller impact on
entry wages but a larger impact on separations and future wage growth if
matches are formed under limited information. Empirically, we find such
patterns for inexperienced workers and workers who were hired from
non-employment, which are also groups where mismatch is more pronounced on
average. Most learning about job-specific mismatch happens within a year.
Experienced job-to-job movers appear to match under much less uncertainty.
They are better matched on entry and mismatch have a smaller effect on
their initial separation rates and later wage growth. Instead, match
quality is priced into their starting wages.
Keywords: Matching; Job search; Comparative advantage; Employer learning; (follow links to similar papers)
JEL-Codes: J24; J31; J62; J64; (follow links to similar papers)
50 pages, November 18, 2015
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