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Choice, Order Statistics and the Distribution of Earnings

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  • Michael Sattinger

Abstract

This paper analyzes the distribution of earnings as being generated by workers choosing among occupations on the basis of earnings maximization. A worker’s earnings then have characteristics of an order statistic. The extension to multiple occupations leads to the revision results from A.D. Roy’s two-occupation case. An additional occupation raises expected earnings while in general reducing earnings inequality. Asymptotic results from order statistics suggest that the process of occupational choice determines a limiting distribution of earnings independently of underlying distributions of occupational abilities.

Suggested Citation

  • Michael Sattinger, 1997. "Choice, Order Statistics and the Distribution of Earnings," Journal of Income Distribution, Ad libros publications inc., vol. 6(1), pages 1-1, June.
    • Handle: RePEc:jid:journl:y:1997:v:06:i:1:p:1-1
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    File URL: http://jid.journals.yorku.ca/index.php/jid/article/view/670
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