No. 2/2026: Cities and assortative matching dynamics over worker careers

Abstract

Superior employment matching is considered a key source of agglomeration economies, yet little is known about how urban scale affects matching over workers careers. Using full-count Norwegian registry data from 1995-2019, we estimate two-way worker and plant fixed effects to construct a worker-level measure of assortative matching. We find that job matches are more assortative in cities and that city workers progress more rapidly toward increasingly better matches over the career. These gains are concentrated among high-ability workers, while low-ability workers become increasingly mismatched in cities. For migrants, assortative matching initially declines following relocation but improves with subsequent job transitions.