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.
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Bibliographic InfoPaper provided by University College London in its series Open Access publications from University College London with number http://discovery.ucl.ac.uk/12629/.
Date of creation: Nov 2001
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Publication status: Published in REV ECON STAT (2001-11) v.83, p.663-674
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Other versions of this item:
- Christian Dustmann & Arthur van Soest, 2001. "Language Fluency And Earnings: Estimation With Misclassified Language Indicators," The Review of Economics and Statistics, MIT Press, vol. 83(4), pages 663-674, November.
- 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; Longitudinal Data; Spatial Time Series
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
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