Complementarity and Aggregate Implications of Assortative Matching: A Nonparametric Analysis
Bryan Graham (),
Guido Imbens () and
Geert Ridder ()
No 14860, NBER Working Papers from National Bureau of Economic Research, Inc
This paper presents methods for evaluating the effects of reallocating an indivisible input across production units, taking into account resource constraints by keeping the marginal distribution of the input fixed. When the production technology is nonseparable, such reallocations, although leaving the marginal distribution of the reallocated input unchanged by construction, may nonetheless alter average output. Examples include reallocations of teachers across classrooms composed of students of varying mean ability. We focus on the effects of reallocating one input, while holding the assignment of another, potentially complementary, input fixed. We introduce a class of such reallocations -- correlated matching rules -- that includes the status quo allocation, a random allocation, and both the perfect positive and negative assortative matching allocations as special cases. We also characterize the effects of local (relative to the status quo) reallocations. For estimation we use a two-step approach. In the first step we nonparametrically estimate the production function. In the second step we average the estimated production function over the distribution of inputs induced by the new assignment rule. These methods build upon the partial mean literature, but require extensions involving boundary issues. We derive the large sample properties of our proposed estimators and assess their small sample properties via a limited set of Monte Carlo experiments.
JEL-codes: C14 C21 C52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ecm
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (12) Track citations by RSS feed
Published as Bryan S. Graham & Guido W. Imbens & Geert Ridder, 2014. "Complementarity and aggregate implications of assortative matching: A nonparametric analysis," Quantitative Economics, Econometric Society, vol. 5, pages 29-66, 03.
Downloads: (external link)
Journal Article: Complementarity and aggregate implications of assortative matching: A nonparametric analysis (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:nbr:nberwo:14860
Ordering information: This working paper can be ordered from
Access Statistics for this paper
More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Series data maintained by ().