EconPapers    
Economics at your fingertips  
 

Learning about the nature of production from equilibrium assignment patterns

Luis Garicano () and Thomas N. Hubbard

Journal of Economic Behavior & Organization, 2012, vol. 84, issue 1, 136-153

Abstract: This paper exploits empirically a key insight from Lucas (1978) and Rosen (1982): that the organization of production and the distribution of earnings across individuals are jointly determined by the equilibrium assignment of individuals to firms and hierarchical positions. We study how different classes of production functions generate alternative equilibrium assignments. We then use confidential Census data on U.S. law offices to investigate the form that the production function should take to rationalize earnings patterns in legal services. We argue that earnings patterns in this industry are consistent with a production function that is characterized by asymmetric sensitivity to the skill of agents in different organizational positions, complementarity between managers’ and workers’ skill, and scale effects in individual skill.

Keywords: Hierarchies; Assignment; Lawyers; Earnings (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S016726811200145X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:84:y:2012:i:1:p:136-153

DOI: 10.1016/j.jebo.2012.07.007

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2022-08-06
Handle: RePEc:eee:jeborg:v:84:y:2012:i:1:p:136-153