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Compensating Differentials and Self-selection: An Application to Lawyers

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Author Info
Goddeeris, John H
Abstract

This paper models individual choice between two types of jobs as dependent on the difference i n potential earnings and on preferences for nonpecuniary compensation. The model leads to simultaneous estimation of earnings and job choice functions in a manner that takes account of self-selection of individuals into the sector of highest utility. An application to lawyers choosing between private and "public-interest" law casts doubt on the notion that public-interest lawyers are accepting substantially lower earnings by virtue of their choice-an impression derived from es timation of earnings functions without accounting for self-selection. The estimation technique also takes proper account of the "'choice-based" nature of the sample. Copyright 1988 by University of Chicago Press.

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Publisher Info
Article provided by University of Chicago Press in its journal Journal of Political Economy.

Volume (Year): 96 (1988)
Issue (Month): 2 (April)
Pages: 411-28
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Handle: RePEc:ucp:jpolec:v:96:y:1988:i:2:p:411-28

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  1. C. Lucifora & D. Meurs, 2004. "The Public Sector Pay Gap in France, Great Britain and Italy," Working Papers ERMES 0403, ERMES, University Paris 2. [Downloadable!]
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  2. Michele Mosca & Marco Musella & Francesco Pastore, 2006. "Relational Goods, Monitoring and Non-Pecuniary Compensations in the Nonprofit Sector: The Case of the Italian Social Services," IZA Discussion Papers 2254, Institute for the Study of Labor (IZA). [Downloadable!]
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  3. Jed DeVaro & Dana Samuelson, 2005. "Why Are Promotions Less Likely in Nonprofit Firms?," Labor and Demography 0501010, EconWPA. [Downloadable!]
  4. Francois, Patrick, 2005. "Making A Difference," CEPR Discussion Papers 5158, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  5. StÈphane Bonhomme & GrÈgory Jolivet, 2009. "The pervasive absence of compensating differentials," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(5), pages 763-795. [Downloadable!]
  6. Patrick Francois, 2004. "'Making a Difference': Labor Donations in the Production of Public Goods," The Centre for Market and Public Organisation 04/093, Department of Economics, University of Bristol, UK. [Downloadable!]
  7. Monica Auteri & Richard Wagner, 2007. "The Organizational Architecture of Nonprofit Governance: Economic Calculation Within an Ecology of Enterprises," Public Organization Review, Springer, vol. 7(1), pages 57-68, March. [Downloadable!] (restricted)
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