The comparative statics of differential rents in two-sided matching markets
This paper studies how shifts in the distribution of quality on one side of the market affect earnings on the other side in a model of one-to-one matching. A more dispersed distribution of quality hurts the low ability agents on the other side because they are matched to inferior partners. Earnings being a differential rent in these markets, this pulls down the earnings of high quality agents as well. It is shown that a more dispersed ability distribution reduces total earnings on the opposite side of the market. Under some conditions, all agents on that side are hurt. Copyright Springer Science+Business Media, Inc. 2007
Volume (Year): 5 (2007)
Issue (Month): 2 (August)
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Boston University - Department of Economics - The Institute for Economic Development Working Papers Series
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