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Occupational Choice and Matching in the Labor Market

Listed author(s):
  • Eric Mak
  • Aloysius Siow
Registered author(s):

    Integrating Roy with Becker, this paper studies occupational choice and matching in the labor market. Our model generates occupation earnings distributions which are right skewed, have firm fixed effects, and large changes in aggregate earnings inequality without significant changes in within firm inequality. The estimated model fits the earnings distribution both across and within firms in Brazil in 1999. It shows that the recent decrease in aggregate Brazilian earnings inequality is largely due to the increase in her educational attainment over the same years. A simulation of skilled biased technical change in the model also qualitatively fit the recent changes in earnings inequality in the United States.

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    File URL: https://www.economics.utoronto.ca/public/workingPapers/tecipa-577.pdf
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    Paper provided by University of Toronto, Department of Economics in its series Working Papers with number tecipa-577.

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    Length: Unknown pages
    Date of creation: 03 Feb 2017
    Handle: RePEc:tor:tecipa:tecipa-577
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    1. Lustig, Nora & Lopez-Calva, Luis F. & Ortiz-Juarez, Eduardo, 2013. "Declining Inequality in Latin America in the 2000s: The Cases of Argentina, Brazil, and Mexico," World Development, Elsevier, vol. 44(C), pages 129-141.
    2. Robert McCann & Maxim Trokhimtchouk, 2010. "Optimal partition of a large labor force into working pairs," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 42(2), pages 375-395, February.
    3. Oskar Nordström Skans & Per-Anders Edin & Bertil Holmlund, 2009. "Wage Dispersion Between and Within Plants: Sweden 1985-2000," NBER Chapters,in: The Structure of Wages: An International Comparison, pages 217-260 National Bureau of Economic Research, Inc.
    4. Alfred Galichon, 2016. "Optimal Transport Methods in Economics," Economics Books, Princeton University Press, edition 1, number 10870.
    5. Lawrence F. Katz & Kevin M. Murphy, 1992. "Changes in Relative Wages, 1963–1987: Supply and Demand Factors," The Quarterly Journal of Economics, Oxford University Press, vol. 107(1), pages 35-78.
    6. Michael Kremer, 1993. "The O-Ring Theory of Economic Development," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 551-575.
    7. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
    8. Xiaokai Yang & Jeff Borland, 2005. "A Microeconomic Mechanism For Economic Growth," World Scientific Book Chapters,in: An Inframarginal Approach To Trade Theory, chapter 18, pages 409-436 World Scientific Publishing Co. Pte. Ltd..
    9. 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.
    10. Rosen, Sherwin, 1983. "Specialization and Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 1(1), pages 43-49, January.
    11. Christian Moser & Niklas Engbom, 2016. "Earnings Inequality and the Minimum Wage: Evidence from Brazil," 2016 Meeting Papers 72, Society for Economic Dynamics.
    12. Robert J. McCann & Xianwen Shi & Aloysius Siow & Ronald Wolthoff, 2015. "Becker Meets Ricardo: Multisector Matching with Communication and Cognitive Skills," Journal of Law, Economics and Organization, Oxford University Press, vol. 31(4), pages 690-720.
    13. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, Elsevier.
    14. Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-846, July-Aug..
    15. Erica L. Groshen, 1991. "Sources of Intra-Industry Wage Dispersion: How Much Do Employers Matter?," The Quarterly Journal of Economics, Oxford University Press, vol. 106(3), pages 869-884.
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