A0896
Title: Semi-nonparametric models of multidimensional matching: An optimal transport approach
Authors: Young Jun Lee - Korea Institute for International Economic Policy (Korea, South) [presenting]
Abstract: The aim is to propose empirically tractable multidimensional matching models focusing on worker-job matching. The parametric model proposed by a prior study is generalized, which relies on the assumption of joint normality of observed characteristics of workers and jobs. Unrestricted distributions of characteristics are allowed and show identification of the production technology and equilibrium wage and matching functions using tools from optimal transport theory. Given identification, efficient, consistent, asymptotically normal sieve estimators are proposed. Lindenlaub's empirical application is revisited, and it is shown that, between 1990 and 2010, the U.S. economy experienced much larger technological progress favoring cognitive abilities than the original findings suggest. Furthermore, the flexible model specifications provide a significantly better fit for patterns in the evolution of wage inequality.
