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No Line Left Behind: Assortative Matching Inside the Firm

Achyuta Adhvaryu¹; Vittorio Bassi²; Anant Nyshadham³; Jorge Tamayo⁴

¹ University of California at San Diego [email protected] · ² University of Southern California [email protected] · ³ University of Michigan [email protected] · ⁴ Harvard Business School [email protected]

Abstract We leverage the high degree of worker mobility across production lines in a large Indian manufacturer to estimate the sorting of workers to managers, using data on daily worker productivity. We find negative assortative matching (NAM): better workers tend to be matched with worse managers. Estimates of the production technology, however, reveal that productivity would increase by up to 4% under positive sorting. Exploiting a survey of managers and data on orders from multinational brands, we document that NAM arises, at least partly, because maintaining valuable relationships with buyers provides strong incentives to avoid delays on any given production line.

DOI

10.1162/rest_a_01516

Pages

1-45

Language

en

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