Davide Alonzo
Giovanni Gallipoli

We characterize the employment value of different worker-occupation matches and estimate the substitutability of match-specific inputs in production. In an equilibrium model of the U.S. labor market, we examine the responses of employment and wages to shifts in technology and match values. Earnings are mainly driven by technology while match value heterogeneity influences the distribution of workers across occupations. The model delivers measures of rents and compensating differentials. After 1980, employment rents increased for educated workers but stagnated for others. Compensating differentials have risen on average, particularly in occupations where worker mobility has grown.

Publication Type
Working Paper
File Description
First version, February 24, 2023
JEL Codes
D51: Exchange and Production Economies
D58: Computable and Other Applied General Equilibrium Models
J20: Demand and Supply of Labor: General
J30: Wages, Compensation, and Labor Costs: General
J62: Job, Occupational, and Intergenerational Mobility; Promotion
technological change