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Becker Meets Ricardo: Multisector Matching with Social and Cognitive Skills

Author Info

Listed author(s):
  • 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.

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File URL: http://ftp.iza.org/dp6533.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6533.

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Length: 48 pages
Date of creation: Apr 2012
Publication status: published in: Journal of Law, Economics and Organization, 2015, 31 (4), 690-720
Handle: RePEc:iza:izadps:dp6533
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Keywords: social welfare; social skill; cognitive skill; matching; sorting; education; labor; marriage; linear programming;

Other versions of this item:

Find related papers by 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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  1. Eugene Choo & Aloysius Siow, 2006. "Who Marries Whom and Why," Journal of Political Economy, University of Chicago Press, vol. 114(1), pages 175-201, February.
  2. James Heckman & Rodrigo Pinto & Peter Savelyev, 2013. "Understanding the Mechanisms through Which an Influential Early Childhood Program Boosted Adult Outcomes," American Economic Review, American Economic Association, vol. 103(6), pages 2052-2086, October.
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  5. Chiappori, Pierre-André & Oreffice, Sonia & Quintana-Domeque, Climent, 2010. "Matching with a Handicap: The Case of Smoking in the Marriage Market," IZA Discussion Papers 5392, Institute for the Study of Labor (IZA).
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  7. Michael Waldman, 1984. "Worker Allocation, Hierarchies and the Wage Distribution," Review of Economic Studies, Oxford University Press, vol. 51(1), pages 95-109.
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  9. Almlund, Mathilde & Duckworth, Angela Lee & Heckman, James & Kautz, Tim, 2011. "Personality Psychology and Economics," Handbook of the Economics of Education, Elsevier.
  10. Keane, Michael P & Wolpin, Kenneth I, 1997. "The Career Decisions of Young Men," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 473-522, June.
  11. Siwan Anderson, 2003. "Why Dowry Payments Declined with Modernization in Europe but Are Rising in India," Journal of Political Economy, University of Chicago Press, vol. 111(2), pages 269-310, April.
  12. Kuhn, Peter J. & Weinberger, Catherine, 2002. "Leadership Skills and Wages," IZA Discussion Papers 482, Institute for the Study of Labor (IZA).
  13. Robert A. Pollak, 2011. "Allocating Time: Individuals' Technologies, Household Technology, Perfect Substitutes, and Specialization," NBER Working Papers 17529, National Bureau of Economic Research, Inc.
  14. Gibbons, Robert & Waldman, Michael, 1999. "Careers in organizations: Theory and evidence," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 36, pages 2373-2437 Elsevier.
  15. Dennis Epple & Richard Romano & Holger Sieg, 2006. "Admission, Tuition, and Financial Aid Policies in the Market for Higher Education," Econometrica, Econometric Society, vol. 74(4), pages 885-928, 07.
  16. Luis Garicano & Esteban Rossi-Hansberg, 2004. "Inequality and the Organization of Knowledge," American Economic Review, American Economic Association, vol. 94(2), pages 197-202, May.
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  18. Luis Garicano & Esteban Rossi-Hansberg, 2006. "Organization and Inequality in a Knowledge Economy," The Quarterly Journal of Economics, Oxford University Press, vol. 121(4), pages 1383-1435.
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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.

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