Occupational Segregation and the (Mis)allocation of Talent

Aufsätze referiert extern - Web of Science

David Pothier

In: The Scandinavian Journal of Economics 120 (2018), 1, S. 242-267


In this paper, I study how occupational segregation affects the allocation of talent in a competitive labour market. I propose a model of occupational choice in which heterogeneous workers must rely on their social contacts to acquire job‐vacancy information. While occupational segregation implies benefits in terms of job‐finding probability, it also leads to allocative inefficiencies. Efficient and equilibrium outcomes differ due to a network externality that leads workers to segregate too little, and a pecuniary externality that leads workers to segregate too much. Which effect dominates depends on the elasticity of wages to changes in the degree of occupational segregation.

JEL-Classification: D62;E24;J24
Keywords: Allocation of talent; occupational choice; social networks