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The assignment of workers to tasks with endogenous supply of skills

  • Arnaud Dupuy

    (Reims Management School, Maastricht School of Management and IZA. Corresponding address: Address: Reims Management School (RMS), 59, rue Pierre Taittinger - 51100 Reims, France. Email: arnaud.dupuy@reims-ms.fr.)

This paper presents a general equilibrium assignment model of workers to tasks with endogenous supply of skills. The model has 2 key features. First, skills are endogenous and multidimensional. Sec- ond, two types of assignment occur; workers self-select the type of skills to supply and rms assign workers to tasks/machines. Equilib- rium is characterized by two functions mapping skills of each type to tasks and two wage functions, one for each type of skills, so that the wage distributions generally overlap. The model shows that the im- pact of any given skilled-biased technical change on wage inequality is tightly related to the distribution of skills in the population. Produc- tivity e¤ects can be over or under estimated by wage data when the supply of skills is endogenous. The model also shows that Johnson’s (1997) distinction between intensive and extensive technical change is impossible when supply is endogenous.

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File URL: http://web2.msm.nl/RePEc/msm/wpaper/MSM-WP2012-45.pdf
File Function: First version, 2012
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Paper provided by Maastricht School of Management in its series Working Papers with number 2012/45.

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Length: 37 pages
Date of creation: Nov 2012
Date of revision:
Handle: RePEc:msm:wpaper:2012/45
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  1. 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.
  2. Xavier Gabaix & Augustin Landier, 2006. "Why Has CEO Pay Increased So Much?," NBER Working Papers 12365, National Bureau of Economic Research, Inc.
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  4. Marko Tervio, 2008. "The Difference That CEOs Make: An Assignment Model Approach," American Economic Review, American Economic Association, vol. 98(3), pages 642-68, June.
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  7. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, May.
  8. 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.
  9. Crifo, Patricia, 2008. "Skill supply and biased technical change," Labour Economics, Elsevier, vol. 15(5), pages 812-830, October.
  10. George E. Johnson, 1997. "Changes in Earnings Inequality: The Role of Demand Shifts," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 41-54, Spring.
  11. Daron Acemoglu, 2000. "Technical Change, Inequality, and the Labor Market," NBER Working Papers 7800, National Bureau of Economic Research, Inc.
  12. Maarten Goos & Alan Manning, 2003. "Lousy and lovely jobs: the rising polarization of work in Britain," LSE Research Online Documents on Economics 20002, London School of Economics and Political Science, LSE Library.
  13. Luis Garicano & Esteban Rossi-Hansberg, 2006. "Organization and Inequality in a Knowledge Economy," The Quarterly Journal of Economics, MIT Press, vol. 121(4), pages 1383-1435, November.
  14. Sherwin Rosen, 1982. "Authority, Control, and the Distribution of Earnings," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 311-323, Autumn.
  15. Bertrand Candelon & Arnaud Dupuy, 2014. "Hierarchical Organization and Performance Inequality: Evidence from Professional Cycling," Working Papers 2014-044, Department of Research, Ipag Business School.
  16. Robert J. Willis & Sherwin Rosen, 1978. "Education and Self-Selection," NBER Working Papers 0249, National Bureau of Economic Research, Inc.
  17. James Heckman & Lance Lochner & Christopher Taber, 1998. "Explaining Rising Wage Inequality: Explanations With A Dynamic General Equilibrium Model of Labor Earnings With Heterogeneous Agents," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(1), pages 1-58, January.
  18. Dupuy, Arnaud, 2008. "The Assignment of Workers to Tasks, Wage Distribution and Technical Change: A Critical Review," IZA Discussion Papers 3379, Institute for the Study of Labor (IZA).
  19. Maarten Goos & Alan Manning, 2003. "Lousy and Lovely Jobs: the Rising Polarization of Work in Britain," CEP Discussion Papers dp0604, Centre for Economic Performance, LSE.
  20. Eicher, Theo S, 1996. "Interaction between Endogenous Human Capital and Technological Change," Review of Economic Studies, Wiley Blackwell, vol. 63(1), pages 127-44, January.
  21. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
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