Introducing Capacity Constraints in a Roy Model: Selection Mechanisms and Implications for Talent Allocation
The Roy model is a foundational framework for analyzing the sorting of individuals and the allocation of skills in contexts such as education, immigration, and labor market decisions. While the standard Roy model assumes only self-selection, many real-world scenarios involve capacity constraints that limit such choices. We extend the Roy model by incorporating capacity restrictions and examine how external agents optimally select individuals under these constraints. Secondly, we analyze the effects of the interaction between self-selection and external selection on the allocation of skills and compare the implications of our model to the standard Roy model. Thirdly, we introduce imperfect information about the skills of individuals and investigate how this alters the selection process by the external agents, as well as the resulting allocation of skills. Finally, we propose empirical strategies to test the key implications of our model.
Date: 29 November 2024, 12:45
Venue: Manor Road Building, Manor Road OX1 3UQ
Venue Details: Seminar Room G
Speaker: Jacob Strabo (University of Copenhagen)
Organising department: Department of Economics
Part of: Student Research Workshop in Micro Theory
Booking required?: Not required
Audience: Members of the University only
Editor: Edward Clark