Ranking Firms Using Revealed Preference
January 2017
Working Paper Number:
CES-17-61
Abstract
This paper estimates workers' preferences for firms by studying the structure of employer-toemployer transitions in U.S. administrative data. The paper uses a tool from numerical linear algebra to measure the central tendency of worker flows, which is closely related to the ranking of firms revealed by workers' choices. There is evidence for compensating differential when workers systematically move to lower-paying firms in a way that cannot be accounted for by layoffs or
differences in recruiting intensity. The estimates suggest that compensating differentials account
for over half of the firm component of the variance of earnings.
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:
economist,
employee,
employ,
employed,
average,
shift,
turnover,
tenure,
bias,
employing,
salary,
productivity firms,
hire,
layoff,
compensation
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identified to contain references to specific institutions, datasets, and other organizations.
:
Bureau of Labor Statistics,
Social Security Administration,
National Science Foundation,
National Longitudinal Survey of Youth,
Current Population Survey,
Federal Reserve Bank of Chicago,
Survey of Income and Program Participation,
Longitudinal Employer Household Dynamics,
AKM,
Disability Insurance,
Sloan Foundation,
University of Michigan,
Federal Statistical Research Data Center
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