Roy Model

The Roy Model is an economic theory that explains how people choose jobs or careers based on their skills and the potential income they can earn. It suggests individuals tend to select the occupation or location where their abilities are most valued and rewarded, often leading to a self-sorting process. For example, someone with strong academic skills might pursue a university education and work in a professional field, while others might choose trades or different industries. This model helps explain patterns in workforce distribution and income differences across regions and sectors, emphasizing the importance of individual skills and preferences in economic outcomes.