The comparative statics of differential rents in two-sided matching markets
AbstractThis paper studies how shifts in the distribution of quality on one side of the market affect earnings on the other side in a model of one-to-one matching. A more dispersed distribution of quality hurts the low ability agents on the other side because they are matched to inferior partners. Earnings being a differential rent in these markets, this pulls down the earnings of high quality agents as well. It is shown that a more dispersed ability distribution reduces total earnings on the opposite side of the market. Under some conditions, all agents on that side are hurt. Copyright Springer Science+Business Media, Inc. 2007
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Bibliographic InfoArticle provided by Springer in its journal The Journal of Economic Inequality.
Volume (Year): 5 (2007)
Issue (Month): 2 (August)
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Web page: http://springerlink.metapress.com/link.asp?id=111137
assignment model; skill premium; stochastic dominance; D31; J31; J41;
Other versions of this item:
- Wing Suen, 2005. "The Comparative Statics of Differential Rents in Two-Sided Matching Markets," Departmental Working Papers _172, Chinese University of Hong Kong, Department of Economics.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
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