Language Fluency And Earnings: Estimation With Misclassified Language Indicators
AbstractWe use panel data to analyze the determinants of speaking fluency and wages of immigrants. Our model takes account of two problems that may bias OLS estimates of the impact of speaking fluency on earnings. First, subjective variables on an ordinal discrete scale, such as self-reported language ability, can suffer from misclassification errors. The model decomposes misclassification errors into a time-persistent and a time-varying component. Second, the model accounts for correlated unobserved heterogeneity in language and earnings equation. The main finding is that these two generalizations of the standard model both lead to substantial changes in the estimated effect of speaking fluency on earnings. © 2001 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology
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Bibliographic InfoArticle provided by MIT Press in its journal The Review of Economics and Statistics.
Volume (Year): 83 (2001)
Issue (Month): 4 (November)
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Web page: http://mitpress.mit.edu/journals/
Other versions of this item:
- Dustmann, C. & Soest, A.H.O. van, 1998. "Language Fluency and Earnings: Estimation with Misclassified Language Indicators," Discussion Paper 1998-120, Tilburg University, Center for Economic Research.
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
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- Gilles Grenier, 1984. "The Effects of Language Characteristics on the Wages of Hispanic-American Males," Journal of Human Resources, University of Wisconsin Press, vol. 19(1), pages 35-52.
- George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
- Chiswick, Barry R & Miller, Paul W, 1995. "The Endogeneity between Language and Earnings: International Analyses," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 246-88, April.
- Geoffrey Carliner, 1981. "Wage Differences by Language Group and the Market for Language Skills in Canada," Journal of Human Resources, University of Wisconsin Press, vol. 16(3), pages 384-399.
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