Frictional Assignment

Shouyong Shi

No 988, Working Paper from Economics Department, Queen's University

Abstract: This paper examines efficient and equilibrium allocations in an economy where agents with diverse characteristics are matched through a time-consuming process to produce output. This is cast in a labour market where workers of different skills match with machines of different qualities. The efficient assignment is not always positively assortative and can be decentralized by a competitive mechanism where firms compete by posting wages and committing to the skill that their chosen machines are intended for. Implications on wage inequality are examined.

Keywords: Skills: Wage inequality; Frictions; Efficiency; Matching (search for similar items in EconPapers)
JEL-codes: D33 J31 L11 (search for similar items in EconPapers)
Pages: 44 pages
Date: 1998-11
References: Add references at CitEc
Citations: View citations in EconPapers (23)

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https://www.econ.queensu.ca/sites/econ.queensu.ca/files/qed_wp_988.pdf First version 1998 (application/pdf)

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Working Paper: Frictional Assignment (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:988

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