NBER Publications by Eric Maskin

Evidence from the US, Britain, and France suggests that recent growth in wage inequality has been accompanied by greater segregation of high- and low-skill workers into separate firms. A model in which workers of different skill-levels are imperfect substitutes can simultaneously account for these increases in segregation and inequality either through technological change, or, more parsimoniously, through observed changes in the skill-distribution

Consider an economy subject to two kinds of shocks: (a) an observable shock to the relative demand for final goods which causes dispersion in relative prices, and (b) shocks, unobservable by workers, to the technology for transforming intermediate goods into final goods. A worker in a particular intermediate goods industry knows that the unobserved price of his output is determined by (1) the technological shock that determines which final goods industry uses his output intensively and (2) the price of the final good that uses his output intensively. When there is very little relative price dispersion among final goods, then it doesn't matter which final goods industry uses the worker's output. Thus the technological shock is of very little importance in creating uncertainty about the work...