Multidimensional Sorting: Comparative Statics

Job Boerma, Andrea Ottolini and Aleh Tsyvinski

Papers from arXiv.org

Abstract: Characterizing multidimensional sorting problems is notoriously difficult - solutions are known only for a small number of examples. Our main results completely characterize the comparative statics of sorting and earnings with respect to technological change for a general class of multidimensional assignment models. We show that symmetric technological change passes fully into worker earnings, while antisymmetric change results only in reallocation. In general, both margins adjust, with relative importance governed by the complementarity between workers and jobs and their distributions. To quantitatively illustrate our theory, we quantify responses in sorting and earnings to cognitive skill-biased technological change for U.S. data.

Date: 2025-12, Revised 2026-08
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