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  3. American Economic Review
  4. September 2020
  5. Job Matching under Constraints

Job Matching under Constraints

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Abstract

Studying job matching in a Kelso-Crawford framework, we consider arbitrary constraints imposed on sets of doctors that a hospital can hire. We characterize all constraints that preserve the substitutes condition (for all revenue functions that satisfy the substitutes condition), a critical condition on hospitals' revenue functions for well-behaved competitive equilibria. A constraint preserves the substitutes condition if and only if it is a "generalized interval constraint," which specifies the minimum and maximum numbers of hired doctors, forces some hires, and forbids others. Additionally, "generalized polyhedral constraints" are precisely those that preserve the substitutes condition for all "group separable" revenue functions.

Citation

Kojima, Fuhito, Ning Sun, and Ning Neil Yu. 2020. "Job Matching under Constraints." American Economic Review, 110 (9): 2935-47. DOI: 10.1257/aer.20190780

Additional Materials

JEL Classification

  • C78 Bargaining Theory; Matching Theory
  • D47 Market Design
  • I11 Analysis of Health Care Markets
  • J23 Labor Demand
  • J41 Labor Contracts
  • J44 Professional Labor Markets; Occupational Licensing