A Foundation for Three Popular Assumptions in Job-Matching Models
Matching models usually assume an exogenously given distribution of match productivity, and the act of changing jobs then has the worker taking a new, independent sample from this distribution. Using a "characteristics" approach to matching two heterogeneous populations, this article shows that assumptions concerning the normality and serial independence of match productivity (across successive matches) follow from some simple axioms. Moreover, the normality assumption receives support from an empirical test that uses data on the output of a large group of workers.