Papers like this miss so much. There are so many other factors that can cause workers with the same abilities to wind up with very different salaries. Some workers might not be able to move to accept a better position so they wind up stuck in a lower paying job. Some are better at negotiation. Some have nepotistic connections to their employers, or got into the right old-boy network in college, so they are overpaid. Some lack self-confidence to ask for what they are worth, so since employers don't pay more than they need to, they don't get it. But too many economics papers just assume a rational market and a manageable number of possible variables and that anything else is noise that can be ignored.
"Positive" refers to positive correlation, not positive effects or desirability.<p>Those that believe that "high-ability workers" made themselves, that market valuation of a person is fair and reflects what that person deserves, will also view this positive correlation as positive.<p>Those that see otherwise, e.g. that grok the Matthew Effect[1], systemic prejudice in society, that no human created themselves, or that humans should not be "priced" like commodities, will not. As the paper points out:<p><i>There is sorting everywhere in the economy:</i><p><i>- Wealthier, more educated, more attractive men on average marry wealthier, more educated, more attractive women.</i><p><i>- Higher-income households reside in distinct neighborhoods and send their children to better schools than low-income households.</i><p><i>- Elite universities enroll the most qualified undergraduates.</i><p>[1]: <a href="https://en.wikipedia.org/wiki/Matthew_effect" rel="nofollow noreferrer">https://en.wikipedia.org/wiki/Matthew_effect</a>
Sorting went up for men but down for women? I'm not sure I want to start a DEI fight but I'm also not sure I can think of another answer. EDIT: part time work, apparently.
> Sorting and Wage Inequality: Stronger sorting contributes to wage inequality. High-skill workers employed by highly productive firms tend to earn substantially more, while low-skilled workers at less productive firms earn less.<p>This is not wage inequality because these are not equal things. More productive employees are not equal to less productive ones. Productive men are not equal to less productive (article's words not mien) women. If 2 different things are not equal, then there is no inequality.<p>> Therefore, stronger sorting contributes to widening the gap between high and low earners.<p>The gap between labor and labor is insignificant compared to the gap between labor and capital.
Any study looking at labor sorting need to acknowledge that wages are not the only attribute which people (and employers) selects for. Wages are nice in terms of getting statistics since it is public record, but the conclusion is limited to asking more simplistic questions:<p>Based on the average wage of a persons lifetime, how close will each job a person take be to that expected wage, assuming it is adjusted for time and inflation. Same question for the employer in terms of what they pay employees.
Isn't this really a new perspective on something that economists have been saying for years now? Specifically: the economy has been growing for high-skilled workers and dysfunctional for low-skilled workers. Alternatively, the economy has been unable to efficiently incorporate the efforts of less skilled men.<p>It's nice to have some data, but we still don't know what to do.
While harboring no love for the fed or their constituent parts, sometimes their articles are factually accurate. Presently then, the only issue here is that we have an economy overfinancialized amongst large amounts of debt, where successful men are too often those who are most efficient at procuring government guarentees.