Organization and inequality in a knowledge economy
By: Luis Garicano, Esteban Rossi-Hansberg.
Contributors: Rossi-Hansberg, Esteban.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 11458; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 11458.
Publisher: National Bureau of Economic Research
Published: 2005
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Knowledge workers -- United States.; Management -- United States.; Equality -- United States.
Description: "We present a theory of the organization of work in an economy where knowledge is an essential input in production: a knowledge economy.  In this economy a continuum of agents with heterogeneous skills must choose how much knowledge to acquire and may produce on their own or in organizations.  Our theory generates an assignment of workers to positions, a wage structure, and a continuum of knowledge-based hierarchies.  Organization allows low skill agents to ask others for directions.  Thus, they acquire less knowledge than in isolation.  In contrast, organization allows high skill agents to leverage their knowledge through large teams.  Hence, they acquire more knowledge than on their own.  As a result, organization decreases wage inequality within workers, but increases income inequality among the highest skill agents.  We also show that equilibrium assignments and earnings can be interpreted as the outcome of alternative market institutions such as firms, or consulting and referral markets.  We use our theory to study the impact of information and communication technology, and contrast its predictions with US evidence"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
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Mode of access: World Wide Web.