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Sorting on Skills and Preferences: Tinbergen Meets Sattinger

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  • Dupuy, Arnaud

    () (University of Luxembourg)

Abstract

This paper proposes an assignment model where sorting occurs on attributes including both skills (Sattinger, 1979) and preferences (Tinbergen, 1956). The key feature of this model is that the wage function admits both jobs' and workers' attributes as arguments. Since this function is generically nonlinear (Ekeland et al., 2004), even under positive assortative matching, the correlation between the contribution of workers' attributes to wages and that of jobs' attributes can vary from -1 to 1 depending on the parameters of the model, i.e. preference, technology and the distribution of both sets of attributes. The paper discusses a closed form solution of the model, presents conditions under which nonadditive marginal utility and production function are nonparametrically identified using observations from a single hedonic market and proposes a nonparametric estimator.

Suggested Citation

  • Dupuy, Arnaud, 2010. "Sorting on Skills and Preferences: Tinbergen Meets Sattinger," IZA Discussion Papers 5143, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp5143
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    References listed on IDEAS

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    1. James J. Heckman & Rosa L. Matzkin & Lars Nesheim, 2010. "Nonparametric Identification and Estimation of Nonadditive Hedonic Models," Econometrica, Econometric Society, vol. 78(5), pages 1569-1591, September.
    2. Ivar Ekeland & James J. Heckman & Lars Nesheim, 2002. "Identifying Hedonic Models," American Economic Review, American Economic Association, vol. 92(2), pages 304-309, May.
    3. Amine Ouazad, 2008. "A2REG: Stata module to estimate models with two fixed effects," Statistical Software Components S456942, Boston College Department of Economics.
    4. Bartik, Timothy J, 1987. "Estimating Hedonic Demand Parameters with Single Market Data: The Problems Caused by Unobserved Tastes," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 178-180, February.
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    Cited by:

    1. Jan Eeckhout & Philipp Kircher, 2011. "Identifying Sorting--In Theory," Review of Economic Studies, Oxford University Press, vol. 78(3), pages 872-906.
    2. Arnaud Dupuy, 2018. "Migration in China: to Work or to Wed?," CREA Discussion Paper Series 18-06, Center for Research in Economic Analysis, University of Luxembourg.

    More about this item

    Keywords

    hedonic models; personality traits; firms and workers fixed effects; nonparametric identification;

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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