A Job Competition Model

This chapter presents the role of job competition in the American economy and its implications for programs designed to alter the distribution of income. In a job competition model two sets of factors determine an individual's income. One set of factors determines an individual's relative position in the labor queue; another set of factors, not mutually exclusive of the first, determines the actual distribution of job opportunities in the economy. Workers are ranked in a labor queue based on their training costs regardless of whether the job skill in question is general or specific. Training costs are the basic determinants of the rank order in the labor queue, but lacking direct evidence on specific training costs for specific workers, laborers are ranked according to their background characteristics—age, sex, educational attainment, previous skills, and psychological tests.