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Konstantinos Eleftheriou
''Matching, Specialties and Wage Inequality''
( 2008, Vol. 10 No.11 )
Empirical evidence show that there is a negative relation between policies that accelerate the matching process in labor market and "within-group" wage inequality. We apply the standard "search and matching" framework to construct a labor market model with ex-ante heterogeneous workers, so as to examine and interpret this phenomenon. We show that a composition effect working through the effective rate of employment opportunities (decision pattern through which individuals accept or reject jobs in which they are less specialized) is responsible for the increase in within group inequality as matching process is accelerated.
Keywords: wage inequality
Manuscript Received : Aug 05 2008 Manuscript Accepted : Aug 11 2008

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