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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. Sattinger, Michael, 1984. " Factor Pricing in the Assignment Problem," Scandinavian Journal of Economics, Wiley Blackwell, vol. 86(1), pages 17-34.
  2. Luis Garicano & Esteban Rossi-Hansberg, 2004. "Inequality and the Organization of Knowledge," American Economic Review, American Economic Association, vol. 94(2), pages 197-202, May.
  3. 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.
  4. 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, vol. 103(2), pages 280-315, April.
  5. 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, vol. 112(6), pages 1322-1363, December.
  6. Arnaud Dupuy, 2012. "A Microfoundation for Production Functions: Assignment of Heterogeneous Workers to Heterogeneous Jobs," Economica, London School of Economics and Political Science, vol. 79(315), pages 534-556, 07.
  7. Dupuy,Arnaud & Marey,Philip, 2005. "Shifts and Twists in the Relative Productivity of Skilled Labor," ROA Research Memorandum 007, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  8. Burdett, Ken & Coles, Melvyn G, 1997. "Marriage and Class," The Quarterly Journal of Economics, MIT Press, vol. 112(1), pages 141-68, February.
  9. Xavier Gabaix & Augustin Landier, 2006. "Why Has CEO Pay Increased So Much?," NBER Working Papers 12365, National Bureau of Economic Research, Inc.
  10. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2006. "The Polarization of the U.S. Labor Market," NBER Working Papers 11986, National Bureau of Economic Research, Inc.
  11. Maarten Goos & Alan Manning, 2007. "Lousy and Lovely Jobs: The Rising Polarization of Work in Britain," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 118-133, February.
  12. Shimer, R. & Smith, L., 1998. "Assortive Matching and Search," Papers 98-09, Michigan - Center for Research on Economic & Social Theory.
  13. Yona Rubinstein & James J. Heckman, 2001. "The Importance of Noncognitive Skills: Lessons from the GED Testing Program," American Economic Review, American Economic Association, vol. 91(2), pages 145-149, May.
  14. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
  15. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-90, October.
  16. 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, vol. 36(2), pages 283-302, May.
  17. Sattinger, Michael, 1993. "Assignment Models of the Distribution of Earnings," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 831-80, June.
  18. Marko Tervio, 2008. "The Difference That CEOs Make: An Assignment Model Approach," American Economic Review, American Economic Association, vol. 98(3), pages 642-68, June.
  19. Sattinger, Michael, 1975. "Comparative Advantage and the Distributions of Earnings and Abilities," Econometrica, Econometric Society, vol. 43(3), pages 455-68, May.
  20. Dupuy, Arnaud, 2007. "Educational Self-Selection, Tasks Assignment and Rising Wage Inequality," IZA Discussion Papers 3154, Institute for the Study of Labor (IZA).
  21. Luis Garicano, 2000. "Hierarchies and the Organization of Knowledge in Production," Journal of Political Economy, University of Chicago Press, vol. 108(5), pages 874-904, October.
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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 2012/45, Maastricht School of Management.
  2. Borghans, Lex & ter Weel, Bas, 2008. "Understanding the Technology of Computer Technology Diffusion: Explaining Computer Adoption Patterns and Implications for the Wage Structure," IZA Discussion Papers 3792, Institute for the Study of Labor (IZA).
  3. Koch, Michael & Egger, Hartmut, 2013. "Trade and the Firm-Internal Allocation of Workers to Tasks," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79841, Verein für Socialpolitik / German Economic Association.

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