Cobus Burger () (Department of Economics, University of Stellenbosch)
Abstract
Conventional wage analyses suffers from a debilitating ailment: since there are no observable market wages for individuals who do not work, findings are limited to the sample of the population that are employed. Due to the problem of sample selection bias, using this subsample of working individuals to draw conclusions for the entire population will lead to inconsistent estimates. Remedial procedures have been developed to address this issue. Unfortunately, these models strongly rely on the assumed parametric distribution of the unobservable residuals as well as the existence of an exclusion restriction, delivering biased estimates if either of these assumptions is violated. This has given rise to a recent interest in semi-parametric estimation methods that do not make any distributional assumptions and are thus less sensitive to deviations from normality. This paper will investigate a few proposed solutions to the sample selection problem in an attempt to identify the best model of earnings for South African data.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Stellenbosch University, Department of Economics in its series Working Papers with number
18/2008.
Find related papers by JEL classification: C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Statistical Simulation Methods C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
This paper has been announced in the following NEP Reports:
Did you know? Each page is provided with a technical contact, in case something is not right with the supplied information. See under "publisher info".