Firm-Worker Matching in Industrial Clusters

29 Pages Posted: 23 Oct 2011

See all articles by Octávio Figueiredo

Octávio Figueiredo

Universidade do Porto - Faculdade de Economia (FEP)

Paulo Guimaraes

University of South Carolina - Darla Moore School of Business; IZA Institute of Labor Economics

Douglas P. Woodward

University of South Carolina

Abstract

In this paper we use a novel approach and a large Portuguese employer-employee panel data set to study the hypothesis that industrial agglomeration improves the quality of the firm-worker matching process. Our method makes use of recent developments in the estimation and analysis of models with high-dimensional fixed effects. Using wage regressions with controls for multiple sources of observed and unobserved heterogeneity we find little evidence that the quality of matching increases with firm’s clustering within the same industry. This result supports Freedman’s (2008) analysis using U.S. data.

Keywords: agglomeration, matching, fixed-effects

JEL Classification: R12, R39, J31

Suggested Citation

Figueiredo, Octavio and Guimaraes, Paulo and Woodward, Douglas P., Firm-Worker Matching in Industrial Clusters. IZA Discussion Paper No. 6016, Available at SSRN: https://ssrn.com/abstract=1948012

Octavio Figueiredo (Contact Author)

Universidade do Porto - Faculdade de Economia (FEP) ( email )

Rua Roberto Frias
s/n
Porto, 4200-464
Portugal

Paulo Guimaraes

University of South Carolina - Darla Moore School of Business ( email )

1705 College St
Francis M. Hipp Building
Columbia, SC 29208
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Douglas P. Woodward

University of South Carolina ( email )

The Francis M. Hipp Building
1705 College Street
Columbia, SC 29208
United States
803-777-2510 (Phone)
803-777-9344 (Fax)

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