Efficiency in a matching model with heterogeneous agents: too many good or bad jobs?

• Autores: Maite Blázquez Cuesta, Marcel Jansen
• Localización: Documentos de trabajo. Economic series ( Universidad Carlos III. Departamento de Economía ), Nº. 50, 2003
• Idioma: inglés
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• Resumen

  • This paper analyzes the efficiency of the equilibrium allocation in a matching model with two types of workers and jobs. The technology is such that high-skill workers can perform all jobs, while low-skill workers can only perform unskilled jobs. In this setup two types equilibria may occur. A ¿cross-skill matching equilibrium¿ in which high-skill workers accept all jobs and an ¿ex-post segmentation equilibrium¿ in which they accept only skilled jobs. Our first result shows that the equilibrium with ex-post bargaining is never efficient. Second, under Hosios¿ (1990) condition we show that low-skill workers are overvalued, while the opposite holds for high-skill workers. In equilibrium, firms therefore create too few unskilled jobs and too many skilled jobs.

    In addition, high-skill workers may decide to accept unskilled jobs while the efficient allocation features ex-post segmentation. Finally, in an extension we show that efficiency can be restored through taxation and we analyze how workers¿ bargaining strength affects unemployment and the degree of skill-mismatch.