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Self-selection and the Distribution of Hourly Wages

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  • Heckman, James J
  • Sedlacek, Guilherme L

Abstract

This article formulates and estimates alternative equilibrium models of industrial wage determination and self-selection. In explaining industrial wage differentials, the authors find that it is important to account for heterogenous sector-specific skills and self-selection decisions by agents concerning their sector of employment. The classical Roy model is rejected. So is an efficiency units model of the labor market. A revised Roy model that accounts for comparative advantage in the choice of industrial sectors and choice between market and nonmarket work is much more successful in explaining cross-section wage distributions and their evolution over time. Demand-Side Factors Copyright 1990 by University of Chicago Press.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 8 (1990)
Issue (Month): 1 (January)
Pages: S329-63

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Handle: RePEc:ucp:jlabec:v:8:y:1990:i:1:p:s329-63

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Web page: http://www.journals.uchicago.edu/JOLE/

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