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The Assignment of Workers to Tasks, Wage Distribution and Technical Change: A Critical Review

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  • Dupuy, Arnaud

    ()
    (CEPS/INSTEAD)

Abstract

This paper reviews the literature on two-sided atomeless assignment models of workers to tasks. Using simple parametric examples, the fundamental differences between the comparative advantage and the scale of operations models are illustrated. Holding the distributions of abilities and tasks and the production function of worker-task pairs constant, the two principles are shown to produce different wage distributions and wage inequality. These models are useful to evaluate the general equilibrium effect of technical change on the wage structure. In all models, skilled-biased technical change that impacts the production function of worker-task pairs lead to rising wage inequality.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3379.

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Length: 35 pages
Date of creation: Feb 2008
Date of revision:
Publication status: published in: Journal of Income Distribution, 2008, 17 (3-4), 12-36
Handle: RePEc:iza:izadps:dp3379

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Keywords: technical change; wage structure; assignment models;

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References

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  1. Xavier Gabaix & Augustin Landier, 2006. "Why Has CEO Pay Increased So Much?," 2006 Meeting Papers, Society for Economic Dynamics 518, Society for Economic Dynamics.
  2. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
  3. Sattinger, Michael, 1995. "Search and the Efficient Assignment of Workers to Jobs," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(2), pages 283-302, May.
  4. Burdett, Ken & Coles, Melvyn G, 1997. "Marriage and Class," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 112(1), pages 141-68, February.
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  6. Shimer, R. & Smith, L., 1997. "Assortative Matching and Search," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 97-2a, Massachusetts Institute of Technology (MIT), Department of Economics.
  7. Robert M. Costrell & Glenn C. Loury, 2004. "Distribution of Ability and Earnings in a Hierarchical Job Assignment Model," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 112(6), pages 1322-1363, December.
  8. Dupuy, Arnaud, 2007. "Educational Self-Selection, Tasks Assignment and Rising Wage Inequality," IZA Discussion Papers 3154, Institute for the Study of Labor (IZA).
  9. Dupuy, Arnaud & Marey, Philip S., 2008. "Shifts and twists in the relative productivity of skilled labor," Journal of Macroeconomics, Elsevier, Elsevier, vol. 30(2), pages 718-735, June.
  10. Wing Suen, 2005. "The Comparative Statics of Differential Rents in Two-Sided Matching Markets," Departmental Working Papers, Chinese University of Hong Kong, Department of Economics _172, Chinese University of Hong Kong, Department of Economics.
  11. Dupuy, Arnaud, 2008. "A Microfoundation for Production Functions: Assignment of Heterogenous Workers to Heterogenous Jobs," IZA Discussion Papers 3312, Institute for the Study of Labor (IZA).
  12. Luis Garicano, 2000. "Hierarchies and the Organization of Knowledge in Production," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 108(5), pages 874-904, October.
  13. Luis Garicano & Esteban Rossi-Hansberg, 2004. "Inequality and the Organization of Knowledge," American Economic Review, American Economic Association, American Economic Association, vol. 94(2), pages 197-202, May.
  14. Maarten Goos & Alan Manning, 2003. "Lousy and Lovely Jobs: the Rising Polarization of Work in Britain," CEP Discussion Papers dp0604, Centre for Economic Performance, LSE.
  15. Teulings, Coen N, 1995. "The Wage Distribution in a Model of the Assignment of Skills to Jobs," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 103(2), pages 280-315, April.
  16. Sattinger, Michael, 1984. " Factor Pricing in the Assignment Problem," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 86(1), pages 17-34.
  17. Yona Rubinstein & James J. Heckman, 2001. "The Importance of Noncognitive Skills: Lessons from the GED Testing Program," American Economic Review, American Economic Association, American Economic Association, vol. 91(2), pages 145-149, May.
  18. Sattinger, Michael, 1993. "Assignment Models of the Distribution of Earnings," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 831-80, June.
  19. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 87(5), pages 972-90, October.
  20. Marko Tervio, 2008. "The Difference That CEOs Make: An Assignment Model Approach," American Economic Review, American Economic Association, American Economic Association, vol. 98(3), pages 642-68, June.
  21. Sattinger, Michael, 1975. "Comparative Advantage and the Distributions of Earnings and Abilities," Econometrica, Econometric Society, Econometric Society, vol. 43(3), pages 455-68, May.
  22. Maarten Goos & Alan Manning, 2003. "Lousy and lovely jobs: the rising polarization of work in Britain," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 20002, London School of Economics and Political Science, LSE Library.
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Citations

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Cited by:
  1. Arnaud Dupuy, 2012. "The assignment of workers to tasks with endogenous supply of skills," Working Papers, Maastricht School of Management 2012/45, Maastricht School of Management.
  2. Bas ter Weel & L. Borghans, 2009. "Understanding the technoloy of computer technology diffusion: explaining computer adoption patterns and implications for the wage structure," CPB Discussion Paper 117, CPB Netherlands Bureau for Economic Policy Analysis.
  3. Hartmut Egger & Michael Koch, 2013. "Trade and the Firm-Internal Allocation of Workers to Tasks," Working Papers, Bavarian Graduate Program in Economics (BGPE) 139, Bavarian Graduate Program in Economics (BGPE).

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