strength of assortative matching. The basic intuition underlying our empirical strategy is that, in the presence of positive … (negative) assortative matching, good workers are more (less) likely to move to better firms than bad workers. Assuming that … matching is pervasive in the labor market. This result is in contrast with what we find from correlating the worker and firm …

found that the incidence of downward wage rigidity is low in Denmark when compared to other countries. Wage flexibility is …, but this rigidity declines during the downturn. The analyses employ matched employer-employee data from Denmark. …