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Job matching within and across firms

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  • Elena Pastorino
Abstract
In order to analyze careers both within and across firms, this paper proposes a matching model of the labor market that extends existing models of job assignment and learning about workers? abilities. The model accounts for worker mobility across jobs and firms, for varying degrees of generality of ability, and for the possibility that firms affect the information they acquire about workers through job assignment. I characterize equilibrium assignment and wages, and show how, depending on how abilities and jobs are distributed across firms, equilibrium gives rise to widely varying patterns of job mobility within firms and turnover across firms, even if matching would be perfectly assortative in the absence of uncertainty. The implied job and wage dynamics display features that are consistent with a broad set of empirical findings on careers in firms and the labor market. In particular, workers can experience gradual promotions and wage increases following successful performance but few or no demotions when employed by the same firm. The model also produces turnover across firms and occupations after both successful and unsuccessful experiences, leading to wage increases or decreases following a firm or occupation change. Overall, the results in this paper provide a unified framework in which to interpret the dynamics of jobs and wages in firms and the labor market.

Suggested Citation

  • Elena Pastorino, 2013. "Job matching within and across firms," Staff Report 482, Federal Reserve Bank of Minneapolis.
    • Handle: RePEc:fip:fedmsr:482
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    Cited by:

    1. Jeronimo Carballo & Richard Mansfield & Charles Adam Pfander, 2024. "U.S. Worker Mobility Across Establishments within Firms: Scope, Prevalence, and Effects on Worker Earnings," Working Papers 24-24, Center for Economic Studies, U.S. Census Bureau.
    2. Jan Eeckhout & Xi Weng, 2022. "Assortative Learning," Economica, London School of Economics and Political Science, vol. 89(355), pages 647-688, July.
    3. Byeongju Jeong, 2020. "Talent Rewards, Talent Uncertainty, and Career Tracks," CERGE-EI Working Papers wp673, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    4. Dalvit, Nicolò & Patel, Aseem & Tan, Joanne, 2022. "Intra-firm hierarchies and gender gaps," Labour Economics, Elsevier, vol. 77(C).

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