Mobility Among Employers and Assortative Matching

Abstract

Job mobility is an outstanding characteristic of most labor markets. However, most of the economic literature focuses on occupational choice and not whether this mobility implies movements to ``better or worse'' firms. One reason for this research gap is the difficulty in establishing if the new employer is ``better or worse'' than the previous one. In sports markets, there is a natural way to rank firms (clubs) based on performance statistics. Using this simple idea, we study the determinants of promotions and demotions of workers among employers and test empirically the existence of assortative matching. We find that player performance is positively correlated with a player's career. Players with better performance have higher probabilities of being promoted and players with worse performance have higher probabilities of being demoted. Older players and players who have been transferred in the past have higher mobility but not a clear up or down tendency.