Abstract. We estimate the components of worker-occupation match values within a model that distinguishes between wages and latent returns. The equilibrium exhibits heterogeneous
rents and we derive a welfare measure that has three properties: (i) it illustrates the impact of marginal workers on the welfare of everyone else; (ii) it delivers inequality measures that
account for non-wage values and compensating differentials; (iii) it relates welfare shifts to changes in different match value components. We use this measure to show that similar patterns of wage inequality can be associated with vastly different welfare outcomes.
Citation
@techreport{alonzo2023changing,
title={The changing value of employment and its implications},
author={Alonzo, Davide and Gallipoli, Giovanni},
year={2023},
institution={CEPR DP17943}
}