Equilibrium distribution of labor productivity: a theoretical model

Hideaki Aoyama (), Hiroshi Iyetomi and Hiroshi Yoshikawa

Journal of Economic Interaction and Coordination, 2015, vol. 10, issue 1, 57-66

Abstract: We construct a theoretical model for equilibrium distribution of workers across sectors with different labor productivity, assuming that a sector can accommodate a limited number of workers which depends only on its productivity. A general formula for such distribution of productivity is obtained, using the detail-balance condition necessary for equilibrium in the Ehrenfest–Brillouin model. We also carry out an empirical analysis on the average number of workers in given productivity sectors on the basis of an exhaustive dataset in Japan. The theoretical formula succeeds in explaining the two distinctive observational facts in a unified way, that is, a Boltzmann distribution with negative temperature on low-to-medium productivity side and a decreasing part in a power–law form on high productivity side. Copyright Springer-Verlag Berlin Heidelberg 2015

Keywords: Labor productivity; Equilibrium; Detailed balance; Firm theory; C02; E20; O40 (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1007/s11403-013-0118-9

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