Loading Events

Ilse Lindenlaub (EUI)

12 June 2014 @ 12:00 - 13:15

 

  • Past event

Details

Date:
12 June 2014
Time:
12:00 - 13:15
Event Category:

“Sorting Multidimensional Types: Theory and Application”

abstract

This paper studies multidimensional matching between workers and jobs. Workers dier in manualand cognitive skills and sort into jobs that demand dierent combinations of these two skills.To study this multidimensional sorting, I develop a theoretical framework that generalizes theunidimensional notion of assortative matching. I derive the equilibrium in closed form and use thisexplicit solution to study biased technological change . The key nding is that an increase in workerjobcomplementarities  in cognitive relative to manual inputs leads to more pronounced sorting andwage inequality across cognitive relative to manual skills. This can trigger wage polarization andboost aggregate wage dispersion. I then estimate the model for the US and identify sizeabletechnology shifts: during the 1990s, worker-job complementarities in cognitive inputs increased by15% whereas complementarities in manual inputs decreased by 41%. In addition to this bias incomplementarities, there has also been a strong cognitive skill  -bias in production. Counterfactualexercises suggest that these technology shifts can account for observed changes in worker-jobsorting, wage polarization and a signicant part of the increase in US wage dispersion.