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Co-operative behaviour, productivity and income dispersion

Author

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  • Emanuela Lotti

Abstract

We claim that in a world with friction in the agent's search process and stochastic job matching, the decision to undertake a private or a joint project may influence both income dispersion and average productivity of the economy under analysis. The paper shows how institurional and technological factors such as entry cost, serach cost and matching technology may affect the number of people that choose the risky market. The paper suggests a unifying framework to study the inequality between groups and the within group, or residual, inequality. The occupational choice of individuals affects the dimension of the modern sector, while the stochastic matching literature sugests that individuals with same skill can earn different incomes.

Suggested Citation

  • Emanuela Lotti, 2002. "Co-operative behaviour, productivity and income dispersion," Working Papers in Public Economics 54, Department of Economics and Law, Sapienza University of Roma.
    • Handle: RePEc:sap:wpaper:wp54
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    More about this item

    Keywords

    Occupational Choice; Inequality; Stochastic Matching.;
    All these keywords.

    JEL classification:

    • 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
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • M55 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Contracting Devices

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