firm heterogeneity to wage inequality. Inspired by sorting theory, we infer firm productivity from estimating firm …-level production functions, taking into account that worker ability and firm productivity may interact at the match level. Using German …, driven by new matches between low-productivity firms and low-ability workers. At the top, sorting decreases, reflected in …

provide a framework with microeconomic foundations that give rise to matching frictions, which can be used to understand the … indeed, more frequently used aggregate matching technology. Existing differences turn out to be crucial for the empirical …

This paper examines wage dispersion and wage dynamics in a stock-flow matching economy with on-the-job search. Under … stock-flow matching, job seekers immediately become fully informed about the stock of viable vacancies. If only one option … ; stock-flow matching …