Measurement of labor quality growth caused by unobservable characteristics
AbstractThe standard economy-wide indices of labor quality (or human capital) largely ignore the role of unobservable worker characteristics. In this paper, we develop a methodology for identifying the contri- butions of both observable and unobservable worker characteristics in the presence of the incidental parameter problem. Based on data for Switzerland over the period 1991-2006, we find that a large part of growth in labor quality is caused by shifts in the distribution of un- observable characteristics. The contributions to growth attributed to education and age are corrected downwards, if unobservable worker characteristics are taken into account. Yet the standard indices of la- bor quality appear to be robust to this extension.
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Bibliographic InfoPaper provided by KOF Swiss Economic Institute, ETH Zurich in its series KOF Working papers with number 08-203.
Length: 23 pages
Date of creation: Jul 2008
Date of revision:
human capital; labor quality;
Other versions of this item:
- Thomas Bolli & Mathias Zurlinden, 2012. "Measurement of labour quality growth caused by unobservable characteristics," Applied Economics, Taylor & Francis Journals, vol. 44(18), pages 2297-2308, June.
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-08-31 (All new papers)
- NEP-BEC-2008-08-31 (Business Economics)
- NEP-HRM-2008-08-31 (Human Capital & Human Resource Management)
- NEP-LAB-2008-08-31 (Labour Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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