Mis-match, Re-match, and Investment
AbstractMobility depends essentially on investment, which often occurs in environments in which individuals match (school) or will match after investing (the labor market). Where partners can transfer surplus to each other only imperfectly (NTU), the pattern of matching will typically be inefficient, involving too much segregation, and providing a possible rationale for ”associational redistribution” such as affirmative action: a social planner who could enforce a matching outcome that differs from the market outcome may raise aggregate social surplus. We show that this static inefficiency due to NTU can be exacerbated in a dynamic environment in which individuals’ productive types are determined by investments made before they match. In contrast to TU models there will typically be investment distortions, with high types over-investing and low types under-investing. We study several forms of associational redistribution, assessing the differential effects of achievement-based and background-based polices; early-stage and later-stage policies; and interactions between them.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Boston University - Department of Economics in its series Boston University - Department of Economics - The Institute for Economic Development Working Papers Series with number dp-189.
Date of creation: May 2009
Date of revision:
Matching; nontransferable utility; affirmative action; segregation; education;
Find related papers by JEL classification:
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- I28 - Health, Education, and Welfare - - Education - - - Government Policy
- H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
- J78 - Labor and Demographic Economics - - Labor Discrimination - - - Public Policy (including comparable worth)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-06-10 (All new papers)
- NEP-GTH-2009-06-10 (Game Theory)
- NEP-LAB-2009-06-10 (Labour Economics)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Raquel Fernández, 2009. "Women's Rights and Development," NBER Working Papers 15355, National Bureau of Economic Research, Inc.
- Andrea Canidio, 2012. "The Allocation of Scientific Talent," CEU Working Papers 2012_7, Department of Economics, Central European University, revised 15 May 2012.
- Bhaskar, Venkataraman & Hopkins, Ed, 2011.
"Marriage as a Rat Race: Noisy Pre-Marital Investments with Assortative Matching,"
CEPR Discussion Papers
8529, C.E.P.R. Discussion Papers.
- Bhaskar, V. & Hopkins, Ed, 2011. "Marriage as a Rat Race: Noisy Pre-Marital Investments with Assortative Matching," SIRE Discussion Papers 2011-65, Scottish Institute for Research in Economics (SIRE).
- Ed Hopkins (University of Edinburgh) and V. Bhaskar (University College London), 2011. "Marriage as a Rat Race: Noisy Pre-Marital Investments with Assortative Matching," ESE Discussion Papers 210, Edinburgh School of Economics, University of Edinburgh.
- Andrea, Canidio, 2010. "Absorptive capacity, the allocation of scientists, and firms' research productivity," MPRA Paper 30257, University Library of Munich, Germany.
- Andrea, Canidio, 2009. "The production of science," MPRA Paper 25218, University Library of Munich, Germany.
- Raquel Fernandez, 2010. "Women's Rights and Development," Working Papers 2011-029, Human Capital and Economic Opportunity Working Group.
- Fernández, Raquel, 2009. "Women's Rights and Development," CEPR Discussion Papers 7464, C.E.P.R. Discussion Papers.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Courtney Sullivan).
If references are entirely missing, you can add them using this form.