Sorting in the Labor Market

Abstract: Do high-ability workers typically work for more productive firms? If so, then we say there is positive sorting between firms and workers in the labor market. In this article, we review evidence on sorting and conclude that it is positive and has been increasing for men in the last several decades. Stronger positive sorting is viewed as one reason behind increasing wage inequality.

Keywords: sorting; workers; wage inequality;

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Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Richmond Fed Economic Brief

Publication Date: 2023-12

Volume: 23

Issue: 41