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Occupational Choice and Matching in the Labor Market

Listed author(s):
  • Mak, Eric

    ()

    (Shanghai University of Finance and Economics)

  • Siow, Aloysius

    ()

    (University of Toronto)

Registered author(s):

    Integrating Roy with Becker, this paper studies occupational choice and matching in the labor market. Our model generates occupation earnings distributions which are right skewed, have firm fixed effects, and large changes in aggregate earnings inequality without significant changes in within firm inequality. The estimated model fits the earnings distribution both across and within firms in Brazil in 1999. It shows that the recent decrease in aggregate Brazilian earnings inequality is largely due to the increase in her educational attainment over the same years. A simulation of skilled biased technical change in the model also qualitatively fits the recent changes in earnings inequality in the United States.

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    File URL: http://ftp.iza.org/dp10584.pdf
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    Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 10584.

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    Length: 53 pages
    Date of creation: Feb 2017
    Handle: RePEc:iza:izadps:dp10584
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    1. Nordström Skans, Oskar & Edin, Per-Anders & Holmlund, Bertil, 2006. "Wage dispersion between and within plants: Sweden 1985-2000," Working Paper Series 2006:9, IFAU - Institute for Evaluation of Labour Market and Education Policy.
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    5. Abowd, J.M. & Kramarz, F. & Margolis, D.N., 1995. "High-Wage Workers and High-Wage Firms," Cahiers de recherche 9503, Universite de Montreal, Departement de sciences economiques.
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    7. Robert E. Lucas Jr., 1978. "On the Size Distribution of Business Firms," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 508-523, Autumn.
    8. Alfred Galichon, 2016. "Optimal Transport Methods in Economics," Economics Books, Princeton University Press, edition 1, number 10870.
    9. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, Elsevier.
    10. 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.
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    12. Rosen, Sherwin, 1983. "Specialization and Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 1(1), pages 43-49, January.
    13. Robert J. McCann & Xianwen Shi & Aloysius Siow & Ronald Wolthoff, 2015. "Becker Meets Ricardo: Multisector Matching with Communication and Cognitive Skills," Journal of Law, Economics and Organization, Oxford University Press, vol. 31(4), pages 690-720.
    14. Christian Moser & Niklas Engbom, 2016. "Earnings Inequality and the Minimum Wage: Evidence from Brazil," 2016 Meeting Papers 72, Society for Economic Dynamics.
    15. Robert McCann & Maxim Trokhimtchouk, 2010. "Optimal partition of a large labor force into working pairs," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 42(2), pages 375-395, February.
    16. Erica L. Groshen, 1991. "Sources of Intra-Industry Wage Dispersion: How Much Do Employers Matter?," The Quarterly Journal of Economics, Oxford University Press, vol. 106(3), pages 869-884.
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