Working Papers

Meritocracy across Countries

• with Oriana Bandiera, Ilse Lindenlaub, Chris Moser, Andrea Prat

• ▷ Abstract NBER Working Paper No. 32375

Are labor markets in higher-income countries more meritocratic, in the sense that worker-job matching is based on skills rather than idiosyncratic attributes unrelated to productivity? If so, why? And what are the aggregate consequences? Using internationally comparable data on worker skills and job skill requirements of over 120,000 individuals across 28 countries, we document that workers' skills better match their jobs' skill requirements in higher-income countries. To quantify the role of worker-job matching in development accounting, we build an equilibrium matching model that allows for cross-country differences in three fundamentals: (i) the endowments of multidimensional worker skills and job skill requirements, which determine match feasibility; (ii) technology, which determines the returns to matching; and (iii) idiosyncratic matching frictions, which capture the role of nonproductive worker and job traits in the matching process. The estimated model delivers two key insights. First, improvements in worker-job matching due to reduced matching frictions account for only a small share of cross-country income differences. Second, however, improved worker-job matching is crucial for unlocking the gains from economic development generated by adopting frontier endowments and technology.

Working Projects

Trade and the Organization of Family Firms: Evidence from India

Import Competition and the Long Run Effects of Industrial Policy: Evidence from India

• Funding: IGC

 

Artificial Intelligence and Judicial State Capacity: Evidence from India

• with Utkarsh Saxena
• Funding: IGC

 

How Much do Firms Save? Financial Frictions and the Microeconomic Implications of the Euler Equation

• Funding: STEG

 

Aggregate Impacts of Command-and-Control Environmental Policy: Evidence from Court-Ordered Mining Bans in India

• Utkarsh Saxena and Henry Zhang
• Funding: PEDL, STICERD

 

Labor Market Frictions, the Organization of Labor, and Structural Change

• with Chinmay Lohani and Utkarsh Saxena
• Funding: STEG

 

Digitizing Historical Indian Plant-Level Data on Labour Outcomes

• with Utkarsh Saxena
• Funding: PEDL, G²LM|LIC