To assess the employment effects of labor costs it is crucial to have reliable estimates of the labor cost elasticity of labor demand. Using a matched firm-worker dataset, we estimate a long run unconditional labor demand function, exploiting information on workers to correct for endogeneity in...

Catalonia’s economy is characterized by linguistic diversity and provides a unique opportunity to measure the incidence of language proficiency on over-education, particularly, whether individuals with deficient language skills tend to acquire more formal skills or, on the contrary, become...

Using a matched firm-worker dataset, we show both theoretically and empirically that positive assortative matching between firms and workers leads to an underestimation of the absolute value of wage elasticity of labor demand.