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Supply and Demand in a Two-Sector Matching Model

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  • Paweł Gola

Abstract

I examine the distributional consequences of technological change in a framework that nests Roy’s (1951) and Becker’s (1973) classical models: workers self-select into two sectors and then match with heterogeneous firms within each sector. In this model, technological change can be decomposed into changes in (i) the degree to which sectors covet the same skill sets and (ii) the extent to which output varies with skill in each sector. By deriving monotone comparative statics results for each of these two types of changes, I am able to provide a comprehensive account of the distributional consequences of technological change.

Suggested Citation

  • Paweł Gola, 2021. "Supply and Demand in a Two-Sector Matching Model," Journal of Political Economy, University of Chicago Press, vol. 129(3), pages 940-978.
    • Handle: RePEc:ucp:jpolec:doi:10.1086/712507
    DOI: 10.1086/712507
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    Cited by:

    1. Sergio Ocampo, 2019. "A task-based theory of occupations with multidimensional heterogeneity," 2019 Meeting Papers 477, Society for Economic Dynamics.
    2. Roy McGee, 2023. "Adverse Selection Among Early Adopters and Unraveling Innovation," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 2022302, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
    3. BURZYNSKI Michal & GOLA Pawel, 2019. "Mexican Migration to the United States: Selection, Assignment, and Welfare," LISER Working Paper Series 2019-10, Luxembourg Institute of Socio-Economic Research (LISER).
    4. Pawe{l} Gola & Yuejun Zhao, 2024. "A Firm Link: Overall, Between- and Within-Firm Inequality Through the Lens of a Sorting Model," Papers 2410.11532, arXiv.org.

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