Heterogeneity, selection and labor market disparities
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- dc.contributor.author Bonfiglioli, Alessandra
- dc.contributor.author Gancia, Gino A.
- dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
- dc.date.accessioned 2020-05-25T09:27:10Z
- dc.date.available 2020-05-25T09:27:10Z
- dc.date.issued 2013-10-01
- dc.date.modified 2020-05-25T09:24:08Z
- dc.description.abstract We propose a model in which differences in socioeconomic and labor market outcomes between ex-ante identical countries can be generated as multiple equilibria sustained by different beliefs on the value of effort for finding jobs. To do so, we study the incentive to improve ability in a model where heterogeneous firms and workers interact in a labor market characterized by matching frictions and costly screening. When effort in improving ability raises both the mean and the variance of the resulting ability distribution, a complementarity between workers'choices and firms'hiring strategies can give rise to multiple equilibria. In the high-effort equilibrium, heterogeneity in ability is larger and induces firms to screen more intensively workers, thereby confirming the belief that effort is important for finding good jobs. In the low-effort equilibrium, ability is less dispersed and firms screen less intensively, which confirms the belief that effort is not so important. The model has novel implications for wage inequality, the distribution of firm characteristics, productivity, sorting patterns between firms and workers, and unemployment rates that can help explain observed differences across countries.
- dc.format.mimetype application/pdf*
- dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=1402
- dc.identifier.citation Review of Economic Dynamics, 31, 2019, 305-325
- dc.identifier.uri http://hdl.handle.net/10230/21306
- dc.language.iso eng
- dc.relation.ispartofseries Economics and Business Working Papers Series; 1402
- dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
- dc.rights.accessRights info:eu-repo/semantics/openAccess
- dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
- dc.subject.keyword wage inequality
- dc.subject.keyword firm heterogeneity
- dc.subject.keyword unemployment
- dc.subject.keyword effort
- dc.subject.keyword beliefs
- dc.subject.keyword screening
- dc.subject.keyword multiple equilibria.
- dc.subject.keyword Macroeconomics and International Economics
- dc.title Heterogeneity, selection and labor market disparities
- dc.title.alternative
- dc.type info:eu-repo/semantics/workingPaper