Becker Meets Ricardo: Multisector Matching with Social and Cognitive Skills

46 Pages Posted: 30 Apr 2012  

Robert J. McCann

University of Toronto - Department of Mathematics

Xianwen Shi

University of Toronto - Department of Economics

Aloysius Siow

University of Toronto - Department of Economics; IZA Institute of Labor Economics

Ronald P. Wolthoff

University of Toronto - Department of Economics; IZA Institute of Labor Economics

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Date Written: April 26, 2012

Abstract

This paper presents a tractable framework for studying frictionless matching in school, work, and marriage when individuals have heterogeneous social and cognitive skills. In the model, there are gains to specialization and team production, but specialization requires communication and coordination between team members, and individuals with more social skills communicate and coordinate at lower resource cost. The theory delivers full task specialization in the labor and education markets, but incomplete specialization in marriage. It also captures well-known matching patterns in each of these sectors, including the commonly observed many-to-one matches in firms and schools. Equilibrium is equivalent to the solution of an utilitarian social planner solving a linear programming problem.

Keywords: matching, specialization, task assignment, span of control

JEL Classification: C78, J24, J31, D50

Suggested Citation

McCann, Robert J. and Shi, Xianwen and Siow, Aloysius and Wolthoff, Ronald P., Becker Meets Ricardo: Multisector Matching with Social and Cognitive Skills (April 26, 2012). Available at SSRN: https://ssrn.com/abstract=2048554 or http://dx.doi.org/10.2139/ssrn.2048554

Robert J. McCann

University of Toronto - Department of Mathematics ( email )

Toronto, Ontario M5S 3G3
Canada

Xianwen Shi (Contact Author)

University of Toronto - Department of Economics ( email )

150 St. George Street
Toronto, Ontario M5S3G7
Canada

Aloysius Siow

University of Toronto - Department of Economics ( email )

150 St. George Street
Toronto, Ontario M5S 3G7
Canada
416-978-4139 (Phone)
416-978-6713 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Ronald P. Wolthoff

University of Toronto - Department of Economics ( email )

150 St. George Street
Toronto, Ontario M5S 3G7
Canada

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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