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Compensating Differentials and Self-selection: An Application to Lawyers

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  • 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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Bibliographic 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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Web page: http://www.journals.uchicago.edu/JPE/

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