This paper studies the matching of opportunities with talent when costly diagnosisconfers an informational advantage to the agent undertaking it. When this agentis under-qualified, adverse selection prevents efficient referrals through fixed-pricecontracts. Spot-market contracts that rely on...

We study cross-country differences in the aggregate production function whenskilled and unskilled labor are imperfect substitutes. We find that there is a skill biasin cross-country technology differences. Higher-income countries use skilled labormore efficiently than lower-income countries,...