Heterogeneity, selection and labor market disparities

Abstract

We propose a model in which di¤erences in socioeconomic and labor market outcomes between ex-ante identical countries can be generated as multiple equilibria sustained by di¤erent beliefs on the value of e¤ort for …nding jobs. To do so, we study the incentive to improve ability in a model where heterogeneous …rms 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 …rms' hiring strategies can give rise to multiple equilibria. In the high-e¤ort equilibrium, heterogeneity in ability is larger and induces …rms to screen more intensively workers, thereby con…rming the belief that e¤ort is important for …nding good jobs. In the low-e¤ort equilibrium, ability is less dispersed and …rms screen less intensively, which con…rms the belief that e¤ort is not so important. The model has novel implications for wage inequality, the distribution of …rm characteristics, productivity, sorting patterns between …rms and workers, and unemployment rates that can help explain observed di¤erences across countries.JEL Classi…cation: E24, J24, J64

Concentration in international markets: Evidence from US imports

“…Finally, in panels g) and h) we exclude industries for which the share of imports of intermediate inputs in total US imports is above 25%. 13 The contributions are largely stable also in this case, suggesting that our decompositions are not in ‡uenced by industries with intensive participation in global value chains.…”

“…In this section we investigate, by means of regression analysis, the correlates of the change in concentration, and its level, both by country-industry and by industry only. In particular, we focus on two concentration measures, the Her…ndahl index and the share of sales by the 13 We identify these industries using data on imports of parts and components over 1972-2001 from Schott (2004).…”

Betting On Exports: Trade and Endogenous Heterogeneity

“…This correlation is positive in the cross-section, but not when controlling for industry fixed-effects, due to the limited time variation in educational attainment.28 In turn, the skill distribution can react endogenously, as inBonfiglioli and Gancia (2014), generating an interesting complementarity between worker and firm heterogeneity.© 2016 The Authors. The Economic Journal published by John Wiley & Sons Ltd on behalf of Royal Economic Society.636 T H E E C O N O M I C J O U R N A L [ M A R C H…”

“… In turn, the skill distribution can react endogenously, as in Bonfiglioli and Gancia (), generating an interesting complementarity between worker and firm heterogeneity. …”

On Sums of Independent Generalized Pareto Random Variables With Applications to Insurance and Cat Bonds

“…Pareto distributions are very heavy tailed and the distribution of the natural logarithm of a sum of Pareto random variables cannot be derived analytically"; R-forge distributions Core Team [19] say "The convolution (i.e. sum) of Pareto I distributions does not have any particular form, but the product of Pareto I distributions does have an analytical form"; (Albrecher and Kortschak [2], Theorem 2.1) derive an integral representation for the tail of the distribution of a sum of Pareto random variables; Bonfiglioli and Gancia [6] say that the "sum of Pareto distributions is intractable"; to mention just a few.…”