Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/70759 
Authors: 
Year of Publication: 
2009
Series/Report no.: 
Working Paper No. 2009-21
Publisher: 
Federal Reserve Bank of Atlanta, Atlanta, GA
Abstract: 
This paper incorporates assignment frictions and sector-specific training into the Roy model of occupational choice. Assignment frictions represent the extent of the market whereas differences in sector-specific training reflect worker specialization. This framework thus captures Adam Smith's idea that the extent of the market determines the division of labor. The paper demonstrates the way in which the relationship between assignment frictions and specialization affects the level and composition of human capital acquisition, aggregate output, and the distribution of income. Not surprisingly, economywide training, output, and specialization increase as the extent of the market increases. The distribution of these gains, however, is uneven. Within group or residual income, distribution does not converge monotonically as search frictions diminish. Comparisons across groups reveal that these effects can become more pronounced as average income increases.
Subjects: 
human capital
occupational choice
job assignment
income distribution
JEL: 
E24
J24
D31
Document Type: 
Working Paper

Files in This Item:
File
Size
269.42 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.