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Sorting on Skills and Preferences: Tinbergen Meets Sattinger

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  • Dupuy, Arnaud

    ()
    (CEPS/INSTEAD)

Abstract

This paper proposes an assignment model where sorting occurs on attributes including both skills (Sattinger, 1979) and preferences (Tinbergen, 1956). The key feature of this model is that the wage function admits both jobs' and workers' attributes as arguments. Since this function is generically nonlinear (Ekeland et al., 2004), even under positive assortative matching, the correlation between the contribution of workers' attributes to wages and that of jobs' attributes can vary from -1 to 1 depending on the parameters of the model, i.e. preference, technology and the distribution of both sets of attributes. The paper discusses a closed form solution of the model, presents conditions under which nonadditive marginal utility and production function are nonparametrically identified using observations from a single hedonic market and proposes a nonparametric estimator.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5143.

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Length: 62 pages
Date of creation: Aug 2010
Date of revision:
Handle: RePEc:iza:izadps:dp5143

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Related research

Keywords: hedonic models; personality traits; firms and workers fixed effects; nonparametric identification;

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References

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  1. Jeremy Lise & Costas Meghir & Jean-Marc Robin, 2013. "Matching, Sorting and Wages," Sciences Po publications, Sciences Po 11, Sciences Po.
  2. Ivar Ekeland & James J. Heckman & Lars Nesheim, 2002. "Identifying Hedonic Models," American Economic Review, American Economic Association, American Economic Association, vol. 92(2), pages 304-309, May.
  3. James J. Heckman & Rosa L. Matzkin & Lars Nesheim, 2010. "Nonparametric Identification and Estimation of Nonadditive Hedonic Models," Econometrica, Econometric Society, Econometric Society, vol. 78(5), pages 1569-1591, 09.
  4. Amine Ouazad, 2008. "A2REG: Stata module to estimate models with two fixed effects," Statistical Software Components, Boston College Department of Economics S456942, Boston College Department of Economics.
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Cited by:
  1. Philipp Kircher & Jan Eeckhout, 2009. "Identifying Sorting, In Theory," 2009 Meeting Papers, Society for Economic Dynamics 581, Society for Economic Dynamics.

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