Heterogeneity, selection and labor market disparities

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...

Descripción completa

Detalles Bibliográficos
Autores: Bonfiglioli, Alessandra, Gancia, Gino A.
Tipo de recurso: artículo
Estado:Versión aceptada para publicación
Fecha de publicación:2019
País:España
Institución:Universitat Pompeu Fabra
Repositorio:Repositorio Digital de la UPF
OAI Identifier:oai:repositori.upf.edu:10230/47195
Acceso en línea:http://hdl.handle.net/10230/47195
http://dx.doi.org/10.1016/j.red.2018.08.002
Access Level:acceso abierto
Palabra clave:Wage inequality
Firm heterogeneity
Unemployment
Effort
Beliefs
Multiple equilibria
id ES_f97f7dcfbf7b4dc9777aba3d4b56fe11
oai_identifier_str oai:repositori.upf.edu:10230/47195
network_acronym_str ES
network_name_str España
repository_id_str
spelling Heterogeneity, selection and labor market disparitiesBonfiglioli, AlessandraGancia, Gino A.Wage inequalityFirm heterogeneityUnemploymentEffortBeliefsMultiple equilibriaWe 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.We acknowledge financial support from the ERC Grant GOPG 240989, the Fundación Ramon Areces, the Ministerio de Ciencia e Innovación (grant ECO2008-04785, ECO2011-25624, ECO2014-59805-P) and the Barcelona GSE.Elsevier202120212019info:eu-repo/semantics/articleinfo:eu-repo/semantics/acceptedVersionapplication/pdfapplication/pdfhttp://hdl.handle.net/10230/47195http://dx.doi.org/10.1016/j.red.2018.08.002reponame:Repositorio Digital de la UPFinstname:Universitat Pompeu FabraInglésReview of economic dynamics. 2019 Jan;31:305-25info:eu-repo/grantAgreement/EC/FP7/240989info:eu-repo/grantAgreement/ES/3PN/ECO2008-04785info:eu-repo/grantAgreement/ES/3PN/ECO2011-25624info:eu-repo/grantAgreement/ES/1PE/ECO2014-59805-P© Elsevier https://doi.org/10.1016/j.red.2018.08.002info:eu-repo/semantics/openAccessoai:repositori.upf.edu:10230/471952026-06-12T07:21:37Z
dc.title.none.fl_str_mv Heterogeneity, selection and labor market disparities
title Heterogeneity, selection and labor market disparities
spellingShingle Heterogeneity, selection and labor market disparities
Bonfiglioli, Alessandra
Wage inequality
Firm heterogeneity
Unemployment
Effort
Beliefs
Multiple equilibria
title_short Heterogeneity, selection and labor market disparities
title_full Heterogeneity, selection and labor market disparities
title_fullStr Heterogeneity, selection and labor market disparities
title_full_unstemmed Heterogeneity, selection and labor market disparities
title_sort Heterogeneity, selection and labor market disparities
dc.creator.none.fl_str_mv Bonfiglioli, Alessandra
Gancia, Gino A.
author Bonfiglioli, Alessandra
author_facet Bonfiglioli, Alessandra
Gancia, Gino A.
author_role author
author2 Gancia, Gino A.
author2_role author
dc.subject.none.fl_str_mv Wage inequality
Firm heterogeneity
Unemployment
Effort
Beliefs
Multiple equilibria
topic Wage inequality
Firm heterogeneity
Unemployment
Effort
Beliefs
Multiple equilibria
description 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.
publishDate 2019
dc.date.none.fl_str_mv 2019
2021
2021
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/acceptedVersion
format article
status_str acceptedVersion
dc.identifier.none.fl_str_mv http://hdl.handle.net/10230/47195
http://dx.doi.org/10.1016/j.red.2018.08.002
url http://hdl.handle.net/10230/47195
http://dx.doi.org/10.1016/j.red.2018.08.002
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.relation.none.fl_str_mv Review of economic dynamics. 2019 Jan;31:305-25
info:eu-repo/grantAgreement/EC/FP7/240989
info:eu-repo/grantAgreement/ES/3PN/ECO2008-04785
info:eu-repo/grantAgreement/ES/3PN/ECO2011-25624
info:eu-repo/grantAgreement/ES/1PE/ECO2014-59805-P
dc.rights.none.fl_str_mv © Elsevier https://doi.org/10.1016/j.red.2018.08.002
info:eu-repo/semantics/openAccess
rights_invalid_str_mv © Elsevier https://doi.org/10.1016/j.red.2018.08.002
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
application/pdf
dc.publisher.none.fl_str_mv Elsevier
publisher.none.fl_str_mv Elsevier
dc.source.none.fl_str_mv reponame:Repositorio Digital de la UPF
instname:Universitat Pompeu Fabra
instname_str Universitat Pompeu Fabra
reponame_str Repositorio Digital de la UPF
collection Repositorio Digital de la UPF
repository.name.fl_str_mv
repository.mail.fl_str_mv
_version_ 1869425100189597696
score 15.81155

Similares en LA Referencia