Economics at your fingertips  

Schooling Choice, Labour Market Matching, and Wages

Jacob Schwartz

Papers from

Abstract: We develop inference for a two-sided matching model where the characteristics of agents on one side of the market are endogenous due to pre-matching investments. The model can be used to measure the impact of frictions in labour markets using a single cross-section of matched employer-employee data. The observed matching of workers to firms is the outcome of a discrete, two-sided matching process where firms with heterogeneous preferences over education sequentially choose workers according to an index correlated with worker preferences over firms. The distribution of education arises in equilibrium from a Bayesian game: workers, knowing the distribution of worker and firm types, invest in education prior to the matching process. Although the observed matching exhibits strong cross-sectional dependence due to the matching process, we propose an asymptotically valid inference procedure that combines discrete choice methods with simulation.

New Economics Papers: this item is included in nep-dcm
Date: 2018-03, Revised 2019-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link) Latest version (application/pdf)

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:

Access Statistics for this paper

More papers in Papers from
Bibliographic data for series maintained by arXiv administrators ().

Page updated 2019-10-28
Handle: RePEc:arx:papers:1803.09020