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Parametric and semiparametric model representations of the conditional mean of wages: do they make a difference against nonparametric ones?

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  • Lawrence Dacuycuy

Abstract

This study is concerned with the validation of parametric functional representations of the conditional mean of wages using Philippine data. This is done in the light of studies confirming relative weaknesses associated with parametric approaches to the modelling of human capital earnings functions (Zheng, 2000; Heckman et al ., 2003; Lemieux, 2003; Miles and Mora, 2003). Extending the approaches in Lemieux (2003), Zheng (2000) and Miles and Mora (2003), we conduct consistent specification tests not only on parametric functional forms but also on the semiparametric partially linear model to verify the effect of modelling choice on the schooling-earnings as well as the experience-earnings relationships. Test results indicate that parametric models may still be valid representations of the wage function. In some instances, the semiparametric partially linear wage function holds promise as a modelling alternative to parametric models.

Suggested Citation

  • Lawrence Dacuycuy, 2012. "Parametric and semiparametric model representations of the conditional mean of wages: do they make a difference against nonparametric ones?," Applied Economics, Taylor & Francis Journals, vol. 44(13), pages 1673-1684, May.
    • Handle: RePEc:taf:applec:44:y:2012:i:13:p:1673-1684
    DOI: 10.1080/00036846.2010.548790
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    References listed on IDEAS

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    1. Maluccio, John A., 1998. "Endogeneity of schooling in the wage function," FCND discussion papers 54, International Food Policy Research Institute (IFPRI).
    2. Chiswick, Barry R., 1997. "Interpreting the coefficient of schooling in the human capital earnings function," Policy Research Working Paper Series 1790, The World Bank.
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