Meritocracy across Countries
Abstract:
Are labor markets in higher-income countr ies more meritocratic, in the sense that worker job matching is based on sk ills rather than idiosyncratic attributes unrelated to productivity? If so, why? And what are the aggregate consequences? Using internationally compar able data on worker skills and job skill requirements of over 120,000 indiv iduals across 28 countries, we document that workers’ skills better match t heir jobs’ skill requirements in higher-income countries. To quantify the r ole of worker-job matching in development accounting, we build an equilibri um matching model that allows for cross-country differences in three fundam entals: (i) the endowments of multidimensional worker skills and job skill requirements, which determine matchfeasibility; (ii) technology, which dete rmines the returns to matching; and (iii) idiosyncratic matching frictions, which capture the role of nonproductive worker and job traits in the match ing process. The estimated model delivers two key insights. First, improvem ents in worker-job matching due to reduced matching frictions account for o nly a small share of cross-country income differences. Second, however, imp roved worker-job matching is crucial for unlocking the gains from economic development generated by adopting frontier endowments and technology.
DTSTAMP:20260421T102623Z DTSTART:20250519T163000Z DTEND:20250519T180000Z SEQUENCE:0 TRANSP:OPAQUE END:VEVENT END:VCALENDAR