Composite Sorting

Job Boerma, Aleh Tsyvinski, Ruodu Wang and Zhenyuan Zhang

Papers from arXiv.org

Abstract: This paper introduces an assignment model with concave costs of skill gaps, which arise generally when firms mitigate costs of mismatch as in Stigler (1939) and Laffont and Tirole (1986, 1991). Concave costs of skill gaps imply that the output function is neither supermodular nor submodular. We thus introduce a tractable model that interpolates between the polar canonical cases of supermodularity and submodularity. We characterize sorting, wages, and comparative statics and show these substantively differ from traditional assignment models. Under composite sorting: (1) distinct worker types work in the same occupation, and (2) worker types are simultaneously part of both positive and negative sorting. Quantitatively, our model can generate and help explain earnings dispersion between and within occupations.

Date: 2023-03, Revised 2025-05
New Economics Papers: this item is included in nep-des
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2303.06701 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: https://EconPapers.repec.org/RePEc:arx:papers:2303.06701

Access Statistics for this paper

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