Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1427: JAQ of All Trades: Job Mismatch, Firm Productivity and Managerial Quality

Luca Coraggio (), Marco Pagano (), Annalisa Scognamiglio () and Joacim Tåg ()
Additional contact information
Luca Coraggio: University of Naples Federico II
Marco Pagano: University of Naples Federico II, and, Postal: Research Institute of Industrial Economics, Stockholm, Sweden
Annalisa Scognamiglio: University of Naples Federico II, and, Postal: Research Institute of Industrial Economics, Stockholm, Sweden
Joacim Tåg: Research Institute of Industrial Economics (IFN), Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden

Abstract: We develop a novel measure of job-worker allocation quality (JAQ) by exploiting employer-employee data with machine learning techniques. Based on our measure, the quality of job-worker matching correlates positively with individual labor earnings and firm productivity, as well as with market competition, non-family firm status, and employees’ human capital. Management plays a key role in job-worker matching: when managerial hirings and firings persistently raise management quality, the matching of rank-and-file workers to their jobs improves. JAQ can be constructed from any employer-employee data set including workers’ occupations, and used to explore research questions in corporate finance and organization economics.

Keywords: Jobs; Workers; Matching; Mismatch; Machine Learning; Productivity; Management

JEL-codes: D22; J24; J31; L22; L23; M12; M54

Language: English

77 pages, First version: April 1, 2022. Revised: December 11, 2024. Earlier revisions: October 24, 2022, April 25, 2023, July 6, 2024.

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