Co-operative behaviour, productivity and income dispersion

Emanuela Lotti

No 54, Working Papers in Public Economics from Department of Economics and Law, Sapienza University of Roma

Abstract: We claim that in a world with friction in the agent's search process and stochastic job matching, the decision to undertake a private or a joint project may influence both income dispersion and average productivity of the economy under analysis. The paper shows how institurional and technological factors such as entry cost, serach cost and matching technology may affect the number of people that choose the risky market. The paper suggests a unifying framework to study the inequality between groups and the within group, or residual, inequality. The occupational choice of individuals affects the dimension of the modern sector, while the stochastic matching literature sugests that individuals with same skill can earn different incomes.

Keywords: Occupational Choice; Inequality; Stochastic Matching. (search for similar items in EconPapers)
JEL-codes: J24 J31 J41 M55 (search for similar items in EconPapers)
Pages: 32
Date: 2002-02
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