The Assignment of Workers to Tasks with Endogenous Supply of Skills

Abstract

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Supply and Demand in a Two-Sector Matching Model

“…However, unlike this paper,Dupuy (2015) does not show the equilibrium effect of such changes, providing only a first-order result. That is, the results inDupuy (2015) consider only the first step in the following equilibrium adjustment process: the change in production function affects wages, which affects sorting, which affects wages, etc., until a new equilibrium is reached.supply and demand in two-sector matching model…”

“…However, they focus on trade rather than technology, and their model assumes a single ranking of both workers and managers, so that the key mechanism driving my results is absent. Dupuy (2015), McCann et al (2015, and Mak and Siow (2017) also develop models in which workers self-select into sectors and occupations and match with firms. While the models in Dupuy (2015) and Mak and Siow (2017) share many features with my framework, none of those three papers provides any comparative statics results.…”

“…Dupuy (2015), McCann et al (2015, and Mak and Siow (2017) also develop models in which workers self-select into sectors and occupations and match with firms. While the models in Dupuy (2015) and Mak and Siow (2017) share many features with my framework, none of those three papers provides any comparative statics results. 6…”

“…The quadratic surplus function coupled with the normal skill distribution implies a surplus function that is not monotonic in workers' skills, even after the addition of noninteraction skill terms. For example, the estimated surplus function-see table 10 in Lindenlaub (2017)-is nonmonotonic in manual skill.6Dupuy (2015) investigates the impact of multiplicative changes to the production function on self-selection and wage inequality. However, unlike this paper,Dupuy (2015) does not show the equilibrium effect of such changes, providing only a first-order result.…”

“…For example, the estimated surplus function-see table 10 in Lindenlaub (2017)-is nonmonotonic in manual skill.6Dupuy (2015) investigates the impact of multiplicative changes to the production function on self-selection and wage inequality. However, unlike this paper,Dupuy (2015) does not show the equilibrium effect of such changes, providing only a first-order result. That is, the results inDupuy (2015) consider only the first step in the following equilibrium adjustment process: the change in production function affects wages, which affects sorting, which affects wages, etc., until a new equilibrium is reached.supply and demand in two-sector matching model…”