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Positive Skill Clustering in Role-Assignment Matching Models

Axel Anderson

Working Papers from Georgetown University, Department of Economics

Abstract: Kremer and Maskin (1996) explore optimal pairwise matching when production involves defined roles. Despite underlying Cobb-Douglas production functions, the induced maximum production function is no longer supermodular, and positive sorting does not arise. This paper introduces and solves a general class of role-assignment matching models with a continuum of types and general underlying supermodular production functions. The unique equilibrium entails a novel blend of positive sorting in the large, and locally negative sorting that I call positive clustering. I show how the equilibrium matching changes as the production function changes. In a dynamic extension with CES production, I show that sorting, mobility, and wage inequality positively covary with changes in production across matching markets (or over time). Classification- D31, D51, D71, J24, J31, J6

Keywords: Matching; Sorting; Inequality; Mobility (search for similar items in EconPapers)
Pages: 42
Date: 2021-11-03
New Economics Papers: this item is included in nep-lab
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http://axelanderson.georgetown.domains/Positive-Clustering.pdf Full text (application/pdf)
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Related works:
Journal Article: POSITIVE SKILL CLUSTERING IN ROLE‐ASSIGNMENT MATCHING MODELS (2022) Downloads
Working Paper: Positive Skill Clustering in Role Assignment Matching Models (2021) Downloads
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Roger Lagunoff Professor of Economics Georgetown University Department of Economics Washington, DC 20057-1036
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