Abstract
There is no best worker in general, only a best worker for a particular firm. We develop a measure of worker-firm match quality that treats fit as a property of the pair, learned from the survival of employment relationships. A two-tower neural network embeds workers, from their career histories and current positions, and firms, from their characteristics and business descriptions, into a common space, and match quality is the cosine similarity of the two vectors. The measure takes its functional form from the skill-weights model of firm-specific human capital, and its only estimated objective, a separation hazard, from the view of the job match as an experience good. Estimated on more than a billion person-periods covering 101 million workers and 8.4 million firms, a 0.1 increase in match quality lowers the odds of separation by 48%. About a quarter of the variance of match quality is specific to the worker-firm pair, which worker-, firm-, and occupation-level measures set to zero by construction. Workers earn more when better matched, especially early in a relationship, and firms whose workforces score higher grow faster, become more profitable, and are issued more, and more valuable, patents over the next five years than their industry peers. Because it scores pairs that never formed, the measure also predicts where movers go, and acquirers record a larger share of the price as goodwill when the target's workers would fit the acquirer better than they fit the target.
Abstract (translated)
URL
https://arxiv.org/abs/2611.16058
