arXiv 24 Mar 2018 · Econometrics
arXiv:1803.09020 · PDF · DOI · OpenAlex · Extracted main text
We develop inference for a two-sided matching model where the characteristics of agents on one side of the market are endogenous due to pre-matching investments. The model can be used to measure the impact of frictions in labour markets using a single cross-section of matched employer-employee data. The observed matching of workers to firms is the outcome of a discrete, two-sided matching process where firms with heterogeneous preferences over education sequentially choose workers according to an index correlated with worker preferences over firms. The distribution of education arises in equilibrium from a Bayesian game: workers, knowing the distribution of worker and firm types, invest in education prior to the matching process. Although the observed matching exhibits strong cross-sectional dependence due to the matching process, we propose an asymptotically valid inference procedure that combines discrete choice methods with simulation.
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The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Newey \ McFadden (1994) `Large sample estimation and hypothesis testing', Handbook of econometrics 4, 2111–2245 | 0.644 | 4 | 1 | 100% |
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| 3 | Kim, Schwartz, Song \ Whang (2019) `Monte carlo inference on two-sided matching models', Econometrics 7(1), 16 | 0.585 | 3 | 1 | 100% |
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| 10 | Lopes de Melo (2018) `Firm wage differentials and labor market sorting: Reconciling theory and evidence', Journal of Political Economy 126(1), 313–346 | 0.511 | 2 | 1 | 100% |
Showing the top 10 of 41 scored citations.