Markets as Queues, with an Application to Education

Boylan, R. (1989). Markets as Queues, with an Application to Education. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-89-018

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Abstract

Sociologists often claim that larger structures, such as labor markets, can not be understood simply as an aggregation of individual exchanges. Yet most models we use are individualistic. This paper develops a queuing model which separates the distribution of individual characteristics from the structure of jobs, allowing a role for each. The model thus makes a sharp distinction between the value of a characteristic for an individual and its value for society, and eliminates the need to assume that people are paid what they're worth. In such a model a group may improve its standing relative to others as its size increases. This possibility is investigated as an explanation for the disproportionate income gains of those with high school and college diplomas. Analysis of some recent U.S. data with a queuing model show small effects of group size on these income gains, although regression based analysis might lead one to conclude that size effects are large.

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