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The assignment of workers to tasks with endogenous supply of skills

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  • Arnaud Dupuy

    (Reims Management School, Maastricht School of Management and IZA. Corresponding address: Address: Reims Management School (RMS), 59, rue Pierre Taittinger - 51100 Reims, France. Email: arnaud.dupuy@reims-ms.fr.)

Abstract

This paper presents a general equilibrium assignment model of workers to tasks with endogenous supply of skills. The model has 2 key features. First, skills are endogenous and multidimensional. Sec- ond, two types of assignment occur; workers self-select the type of skills to supply and rms assign workers to tasks/machines. Equilib- rium is characterized by two functions mapping skills of each type to tasks and two wage functions, one for each type of skills, so that the wage distributions generally overlap. The model shows that the im- pact of any given skilled-biased technical change on wage inequality is tightly related to the distribution of skills in the population. Produc- tivity e¤ects can be over or under estimated by wage data when the supply of skills is endogenous. The model also shows that Johnson’s (1997) distinction between intensive and extensive technical change is impossible when supply is endogenous.

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File URL: http://web2.msm.nl/RePEc/msm/wpaper/MSM-WP2012-45.pdf
File Function: First version, 2012
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Bibliographic Info

Paper provided by Maastricht School of Management in its series Working Papers with number 2012/45.

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Length: 37 pages
Date of creation: Nov 2012
Date of revision:
Handle: RePEc:msm:wpaper:2012/45

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Related research

Keywords: Tasks assignment; endogenous supply of skills; multidimensional skills; human capital; technical change; wage distribution.;

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  1. Willis, Robert J & Rosen, Sherwin, 1979. "Education and Self-Selection," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages S7-36, October.
  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. James Heckman & Lance Lochner & Christopher Taber, 1998. "Explaining Rising Wage Inequality: Explanations With A Dynamic General Equilibrium Model of Labor Earnings With Heterogeneous Agents," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(1), pages 1-58, January.
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  8. Katz, L.F. & Murphy, K.M., 1991. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," Harvard Institute of Economic Research Working Papers 1580, Harvard - Institute of Economic Research.
  9. Patricia Crifo, 2008. "Skill Supply and Biased technical change," Post-Print hal-00243031, HAL.
  10. Arnaud Dupuy, 2008. "The Assignment of Workers to Tasks, Wage Distribution, and Technical Change: A Critical Review," Journal of Income Distribution, Journal of Income Distribution, vol. 17(3-4), pages 12-36, September.
  11. Eicher, Theo S, 1996. "Interaction between Endogenous Human Capital and Technological Change," Review of Economic Studies, Wiley Blackwell, vol. 63(1), pages 127-44, January.
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  13. Maarten Goos & Alan Manning, 2003. "Lousy and lovely jobs: the rising polarization of work in Britain," LSE Research Online Documents on Economics 20002, London School of Economics and Political Science, LSE Library.
  14. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
  15. 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.
  16. Bertrand Candelon & Arnaud Dupuy, 2014. "Hierarchical Organization and Performance Inequality: Evidence from Professional Cycling," Working Papers 2014-044, Department of Research, Ipag Business School.
  17. Carneiro, Pedro & Heckman, James J., 2003. "Human Capital Policy," IZA Discussion Papers 821, Institute for the Study of Labor (IZA).
  18. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, May.
  19. Robert H. Topel, 1997. "Factor Proportions and Relative Wages: The Supply-Side Determinants of Wage Inequality," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 55-74, Spring.
  20. Sherwin Rosen, 1982. "Authority, Control, and the Distribution of Earnings," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 311-323, Autumn.
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