IDEAS home Printed from https://ideas.repec.org/a/kap/jecinq/v5y2007i2p149-158.html
   My bibliography  Save this article

The comparative statics of differential rents in two-sided matching markets

Author

Listed:
  • Wing Suen

Abstract

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

Suggested Citation

  • Wing Suen, 2007. "The comparative statics of differential rents in two-sided matching markets," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(2), pages 149-158, August.
    • Handle: RePEc:kap:jecinq:v:5:y:2007:i:2:p:149-158
    DOI: 10.1007/s10888-006-9034-8
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10888-006-9034-8
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10888-006-9034-8?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Sattinger, Michael, 1993. "Assignment Models of the Distribution of Earnings," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 831-880, June.
    2. Tjalling C. Koopmans & Martin J. Beckmann, 1955. "Assignment Problems and the Location of Economic Activities," Cowles Foundation Discussion Papers 4, Cowles Foundation for Research in Economics, Yale University.
    3. Sattinger, Michael, 1979. "Differential Rents and the Distribution of Earnings," Oxford Economic Papers, Oxford University Press, vol. 31(1), pages 60-71, March.
    4. Robert M. Costrell & 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.
    5. Roth, Alvin E. & Sotomayor, Marilda, 1992. "Two-sided matching," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 16, pages 485-541, Elsevier.
    6. Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-846, July-Aug..
    7. 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.
    8. Sattinger, Michael, 1975. "Comparative Advantage and the Distributions of Earnings and Abilities," Econometrica, Econometric Society, vol. 43(3), pages 455-468, May.
    9. Wing Suen, 2000. "A Competitive Theory of Equilibrium and Disequilibrium Unravelling in Two-Sided Matching," RAND Journal of Economics, The RAND Corporation, vol. 31(1), pages 101-120, Spring.
    10. Crawford, Vincent P., 1991. "Comparative statics in matching markets," Journal of Economic Theory, Elsevier, vol. 54(2), pages 389-400, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ed Hopkins & Tatiana Kornienko, 2010. "Which Inequality? The Inequality of Endowments versus the Inequality of Rewards," American Economic Journal: Microeconomics, American Economic Association, vol. 2(3), pages 106-137, August.
    2. Heidrun C. Hoppe & Benny Moldovanu & Aner Sela, 2009. "The Theory of Assortative Matching Based on Costly Signals," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(1), pages 253-281.
    3. Arnaud Dupuy, 2008. "The Assignment of Workers to Tasks, Wage Distribution, and Technical Change: A Critical Review," Journal of Income Distribution, Ad libros publications inc., vol. 17(3-4), pages 12-36, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Heidrun C. Hoppe & Benny Moldovanu & Aner Sela, 2009. "The Theory of Assortative Matching Based on Costly Signals," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(1), pages 253-281.
    2. Jan Eeckhout & Roberto Pinheiro, 2014. "Diverse Organizations And The Competition For Talent," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55(3), pages 625-664, August.
    3. Sampson, Thomas, 2016. "Assignment reversals: Trade, skill allocation and wage inequality," Journal of Economic Theory, Elsevier, vol. 163(C), pages 365-409.
    4. Jeremy T. Fox, 2018. "Estimating matching games with transfers," Quantitative Economics, Econometric Society, vol. 9(1), pages 1-38, March.
    5. Ferrall, Christopher & Salvanes, Kjell G. & Sørensen, Erik Ø., 2009. "Wages and Seniority When Coworkers Matter: Estimating a Joint Production Economy Using Norwegian Administrative Data," IZA Discussion Papers 4130, Institute of Labor Economics (IZA).
    6. Eriksson, Kimmo & Karlander, Johan & Öller, Lars-Erik, 1996. "Hierarchical Assignments: Stability and Fairness," Working Papers 50, National Institute of Economic Research.
    7. Robert M. Costrell & 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.
    8. Schultheiss, Tobias & Pfister, Curdin & Gnehm, Ann-Sophie & Backes-Gellner, Uschi, 2023. "Education expansion and high-skill job opportunities for workers: Does a rising tide lift all boats?," Labour Economics, Elsevier, vol. 82(C).
    9. Arnaud Dupuy, 2008. "The Assignment of Workers to Tasks, Wage Distribution, and Technical Change: A Critical Review," Journal of Income Distribution, Ad libros publications inc., vol. 17(3-4), pages 12-36, September.
    10. Rui Baptista & Francisco Lima & Miguel Preto, 2013. "Entrepreneurial skills and workers’ wages in small firms," Small Business Economics, Springer, vol. 40(2), pages 309-323, February.
    11. Vartiainen, Juhana, 1999. "Job Assignment and the Gender Wage Differential: Theory and Evidence on Finnish Metalworkers," Working Paper Series 149, Trade Union Institute for Economic Research.
    12. Simeon D. Alder, 2016. "In the Wrong Hands: Complementarities, Resource Allocation, and TFP," American Economic Journal: Macroeconomics, American Economic Association, vol. 8(1), pages 199-241, January.
    13. Han, Seungjin & Yamaguchi, Shintaro, 2015. "Compensating wage differentials in stable job matching equilibrium," Journal of Economic Behavior & Organization, Elsevier, vol. 114(C), pages 36-45.
    14. Määttänen, Niku & Terviö, Marko, 2014. "Income distribution and housing prices: An assignment model approach," Journal of Economic Theory, Elsevier, vol. 151(C), pages 381-410.
    15. Arnaud Costinot & Jonathan Vogel, 2010. "Matching and Inequality in the World Economy," Journal of Political Economy, University of Chicago Press, vol. 118(4), pages 747-786, August.
    16. Pieter A. Gautier & Coen N. Teulings, 2000. "The Right Man for the Job: Increasing Returns in Search?," Econometric Society World Congress 2000 Contributed Papers 0066, Econometric Society.
    17. Hao Li & Shewin Rosen, 1996. "Unraveling in Assignment Markets," NBER Working Papers 5729, National Bureau of Economic Research, Inc.
    18. Hartog, Joop, 2000. "Over-education and earnings: where are we, where should we go?," Economics of Education Review, Elsevier, vol. 19(2), pages 131-147, April.
    19. Michelacci, Claudio & Pijoan-Mas, Josep, 2016. "Labor supply with job assignment under balanced growth," Journal of Economic Theory, Elsevier, vol. 163(C), pages 110-140.
    20. Pieter A. Gautier & Coen N. Teulings, 2015. "Sorting And The Output Loss Due To Search Frictions," Journal of the European Economic Association, European Economic Association, vol. 13(6), pages 1136-1166, December.

    More about this item

    Keywords

    assignment model; skill premium; stochastic dominance; D31; J31; J41;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jecinq:v:5:y:2007:i:2:p:149-158. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.