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Becker Meets Ricardo: Multisector Matching with Social and Cognitive Skills

Author

Listed:
  • McCann, Robert J.

    () (University of Toronto)

  • Shi, Xianwen

    () (University of Toronto)

  • Siow, Aloysius

    () (University of Toronto)

  • Wolthoff, Ronald P.

    () (University of Toronto)

Abstract

This paper presents a tractable framework for studying frictionless matching in school, work, and marriage when individuals have heterogeneous social and cognitive skills. In the model, there are gains to specialization and team production, but specialization requires communication and coordination between team members, and individuals with more social skills communicate and coordinate at lower resource cost. The theory delivers full task specialization in the labor and education markets, but incomplete specialization in marriage. It also captures well-known matching patterns in each of these sectors, including the commonly observed many-to-one matches in firms and schools. Equilibrium is equivalent to the solution of a utilitarian social planner solving a linear programming problem.

Suggested Citation

  • McCann, Robert J. & Shi, Xianwen & Siow, Aloysius & Wolthoff, Ronald P., 2012. "Becker Meets Ricardo: Multisector Matching with Social and Cognitive Skills," IZA Discussion Papers 6533, Institute for the Study of Labor (IZA).
    • Handle: RePEc:iza:izadps:dp6533
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    Cited by:

    1. David J. Deming, 2015. "The Growing Importance of Social Skills in the Labor Market," NBER Working Papers 21473, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    social welfare; social skill; cognitive skill; matching; sorting; education; labor; marriage; linear programming;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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