AbstractThis paper examines efficient and equilibrium allocations in an economy where agents with diverse characteristics are matched through a time-consuming process to produce output. This is cast in a labour market where workers of different skills match with machines of different qualities. The efficient assignment is not always positively assortative and can be decentralized by a competitive mechanism where firms compete by posting wages and committing to the skill that their chosen machines are intended for. Implications on wage inequality are examined.
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Bibliographic InfoPaper provided by Queen's University, Department of Economics in its series Working Papers with number 988.
Length: 44 pages
Date of creation: Nov 1998
Date of revision:
Matching; Efficiency; Frictions; Skills: Wage inequality;
Other versions of this item:
- D33 - Microeconomics - - Distribution - - - Factor Income Distribution
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
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- Benoit Julien & John Kennes & Ian King, 2000.
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98-14, Massachusetts Institute of Technology (MIT), Department of Economics.
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- repec:fth:starer:9816 is not listed on IDEAS
- Boyan Jovanovic, 1998.
"Vintage Capital and Inequality,"
NBER Working Papers
6416, National Bureau of Economic Research, Inc.
- 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.
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