Measurement of labour quality growth caused by unobservable characteristics
AbstractThe standard economy-wide indices of labour quality (or human capital) largely ignore the role of unobservable worker characteristics. In this article, we develop a methodology for identifying the contributions of both observable and unobservable worker characteristics in the presence of the incidental parameter problem. Based on data for Switzerland over the period 1991 to 2006, we find that a large part of growth in labour quality is caused by shifts in the distribution of unobservable worker characteristics. The overall index differs little from the standard indices, but contributions to growth attributed to education and age are corrected downwards.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics.
Volume (Year): 44 (2012)
Issue (Month): 18 (June)
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Other versions of this item:
- Thomas Bolli & Mathias Zurlinden, 2008. "Measurement of labor quality growth caused by unobservable characteristics," KOF Working papers 08-203, KOF Swiss Economic Institute, ETH Zurich.
- Thomas Bolli & Mathias Zurlinden, 2009. "Measurement of labor quality growth caused by unobservable characteristics," Working Papers 2009-01, Swiss National Bank.
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
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