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

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Author Info
Dupuy, Arnaud () (ROA, Maastricht University)

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

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Date of creation: Feb 2008
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Handle: RePEc:iza:izadps:dp3379

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Related research
Keywords: technical change wage structure assignment models

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Find related papers by JEL classification:
D3 - Microeconomics - - Distribution
J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
O3 - Economic Development, Technological Change, and Growth - - Technological Change

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  1. 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.
  2. 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. [Downloadable!]
    Other versions:
  3. Sattinger, Michael, 1984. " Factor Pricing in the Assignment Problem," Scandinavian Journal of Economics, Blackwell Publishing, vol. 86(1), pages 17-34.
  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. [Downloadable!] (restricted)
  5. 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. [Downloadable!] (restricted)
  6. Arnaud Dupuy, 2007. "Educational Self-Selection, Tasks Assignment and Rising Wage Inequality," IZA Discussion Papers 3154, Institute for the Study of Labor (IZA). [Downloadable!]
  7. 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. [Downloadable!] (restricted)
  8. 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. [Downloadable!] (restricted)
  9. Robert E. Lucas Jr., 1978. "On the Size Distribution of Business Firms," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 508-523, Autumn. [Downloadable!] (restricted)
  10. Sattinger, Michael, 1975. "Comparative Advantage and the Distributions of Earnings and Abilities," Econometrica, Econometric Society, vol. 43(3), pages 455-68, May. [Downloadable!] (restricted)
  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). [Downloadable!]
  12. Burdett, Ken & Coles, Melvyn G, 1997. "Marriage and Class," The Quarterly Journal of Economics, MIT Press, vol. 112(1), pages 141-68, February.
  13. Sattinger, Michael, 1993. "Assignment Models of the Distribution of Earnings," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 831-80, June. [Downloadable!] (restricted)
  14. 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. [Downloadable!] (restricted)
    Other versions:
  15. Shimer, R. & Smith, L., 1997. "Assortative Matching and Search," Working papers 97-2b, Massachusetts Institute of Technology (MIT), Department of Economics.
    Other versions:
  16. Dupuy, Arnaud & Marey, Philip S., 2008. "Shifts and twists in the relative productivity of skilled labor," Journal of Macroeconomics, Elsevier, vol. 30(2), pages 718-735, June. [Downloadable!] (restricted)
    Other versions:
  17. Xavier Gabaix & Augustin Landier, 2008. "Why Has CEO Pay Increased So Much?," The Quarterly Journal of Economics, MIT Press, vol. 123(1), pages 49-100, 02. [Downloadable!] (restricted)
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  18. Wing Suen, 2007. "The comparative statics of differential rents in two-sided matching markets," Journal of Economic Inequality, Springer, vol. 5(2), pages 149-158, August. [Downloadable!] (restricted)
    Other versions:
  19. Robert M. Costrell and 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.
    Other versions:
  20. James J. Heckman & Yona Rubinstein, 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. [Downloadable!] (restricted)
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