Wage inequality, segregation by skill and the price of capital in an assignment model

Gavilan, Angel

doi:10.1016/j.euroecorev.2011.05.005

Cited by 7 publications

(4 citation statements)

References 47 publications

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“…For our purposes, it is sufficient to simply form a set of ordered pairs, (y m ist , y f ist ), that satisfy two properties: (i) they capture the notion of assortative mating that we are interested in, and (ii) they are consistent with the distributions implied by the inheritance processes (5). Examples of more fully-articulated assignment mechanisms are in Becker (1973), Gavilán (2012), Kremer and Maskin (1995), Marimon and Zilibotti (1999) and Shimer and Smith (2000).…”

Section: A Model Of How Assortative Mating Affects Inheritancementioning

confidence: 99%

The Informational Content of Surnames, the Evolution of Intergenerational Mobility, and Assortative Mating

Güell

Mora

Telmer

2014

The Review of Economic Studies

115

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We propose a new methodology for measuring intergenerational mobility in economic wellbeing. Our method is based on the joint distribution of surnames and economic outcomes. It circumvents the need for intergenerational panel data, a long-standing stumbling block for understanding mobility. It does so by using cross-sectional data alongside a calibrated structural model in order to recover the traditional intergenerational elasticity measures. Our main idea is simple. If 'inheritance' is important for economic outcomes, then rare surnames should predict economic outcomes in the cross-section. This is because rare surnames are indicative of familial linkages. If the number of rare surnames is small this approach will not work. However, rare surnames are abundant in the highly-skewed nature of surname distributions from most Western societies. We develop a model that articulates this idea and shows that the more important is inheritance, the more informative will be surnames. This result is robust to a variety of different assumptions about fertility and mating. We apply our method using the 2001 census from Catalonia, a large region of Spain. We use educational attainment as a proxy for overall economic well-being. A calibration exercise results in an estimate of the intergenerational correlation of educational attainment of 0.60. We also find evidence suggesting that mobility has decreased among the different generations of the 20th century. A complementary analysis based on sibling correlations confirms our results and provides a robustness check on our method. Our model and our data allow us to examine one possible explanation for the observed decrease in mobility. We find that the degree of assortative mating has increased over time. Overall, we argue that our method has promise because it can tap the vast mines of census data that are available in a heretofore unexploited manner.

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Section: A Model Of How Assortative Mating Affects Inheritancementioning

confidence: 99%

The Informational Content of Surnames, the Evolution of Intergenerational Mobility, and Assortative Mating

Güell

Mora

Telmer

2014

The Review of Economic Studies

115

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“…There is a growing literature that finds that allocation of skills into tasks might play an important role in explaining the difference in growth between the USA and Europe (Wasmer 2006), the higher unemployment rate in Europe than in the USA (Ljungqvist and Sargent 1998), the recent growth in wage inequality (Gavilán 2012;Autor et al 2003) and jobless recoveries (Jamovich and Siu 2012). Although Goos et al (2009) provide evidence of polarization for many European countries, including Spain, this paper is the first one to address, in detail, the polarization hypothesis for Spain at different moments of the business cycle as well as its different impact on different sociodemographic groups of workers.…”

Section: Introductionmentioning

confidence: 99%

The impact of the great recession on employment polarization in Spain

Anghel

Rica

Lacuesta

2014

SERIEs

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This article analyzes changes in the occupational employment share in Spain for the period 1997-2012 and the way particular sociodemographic groups adapt to those changes. There seems to be clear evidence of employment polarization between 1997 and 2012 that accelerates over the recession. Changes in the composition of the labour supply cannot explain the increase in the share of occupations at the low end of the wage distribution. Sector reallocation may have partially contributed to explain the polarization process in Spain during the years of expansion (1997)(1998)(1999)(2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007) but it is a minor factor during the recession. The polarization of occupations within sectors observed, especially during the recession, appears to be related to a decline in routine tasks which is compensated by an increase in occupations with non-routine service contents, which are found both in the low and high end of the wage distribution. Instead, jobs with a higher degree of abstract contents do not appear to increase their share in total employment during these 15 years. The paper finds that this process has affected males more strongly than females because of their higher concentration in occupations more focused on routine tasks. Among males, for workers under 30 years old, we find a decrease in the share of occupations with more routine tasks which turns into increases in those with more abstract content and particularly with more non-routine service content. Instead, male workers over 30 years old seem to remain in declining occupations to a greater extent. Females of different ages are not affected by the abovementioned changes.

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“…Gavilan (2012) posits production function

\max _{k\ge 0} \sqrt {x}(\alpha y^\sigma +(1-\alpha ) k^\sigma )^\frac{1}{2\sigma }-p k

with

\sigma \in (0,1/2)

\alpha \in (0,1)

. Gavilan assumes positive clustering and numerically explores how sorting and inequality vary in discrete approximations to the continuum model.…”

Section: Introductionmentioning

confidence: 99%

Positive Skill Clustering in Role‐assignment Matching Models

Anderson

2022

Int Economic Review

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Kremer and Maskin (1996, NBER Working Paper) explore matching when production involves defined roles. Despite underlying Cobb–Douglas production functions, the induced maximum production function is not supermodular (SPM), and positive sorting does not arise. This article introduces and solves a general class of role‐assignment matching models with general SPM production functions. The unique equilibrium entails a novel blend of positive sorting in the large, and locally negative sorting that I call positive clustering. I show how the equilibrium matching changes as the production function changes. In a dynamic extension, sorting, mobility, and wage inequality positively covary with changes in production across matching markets.

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Wage inequality, segregation by skill and the price of capital in an assignment model

Cited by 7 publications

References 47 publications

The Informational Content of Surnames, the Evolution of Intergenerational Mobility, and Assortative Mating

The Informational Content of Surnames, the Evolution of Intergenerational Mobility, and Assortative Mating

The impact of the great recession on employment polarization in Spain

Positive Skill Clustering in Role‐assignment Matching Models

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