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Interpretation of negative sample selection effects in wage offer equations

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  • John Ermisch
  • Robert Wright

Abstract

The finding of negative sample selection effects in estimated wage offer equations is often viewed as being 'problematic', resulting from misspecification of the wage and selection processes. This note shows that negative sample selection effects are plausible in the context of Heckman's reservation wage model of labour supply. Therefore, such findings need not necessarily be cause for concern.

Suggested Citation

  • John Ermisch & Robert Wright, 1994. "Interpretation of negative sample selection effects in wage offer equations," Applied Economics Letters, Taylor & Francis Journals, vol. 1(11), pages 187-189.
    • Handle: RePEc:taf:apeclt:v:1:y:1994:i:11:p:187-189
    DOI: 10.1080/135048594357844
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    References listed on IDEAS

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    1. Steinberg, Dan, 1989. "Induced work participation and the returns to experience for welfare women : Evidence from a social experiment," Journal of Econometrics, Elsevier, vol. 41(3), pages 321-340, July.
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    4. Guyonne Kalb & Rosanna Scutella, 2004. "Wage and employment rates in New Zealand from 1991 to 2001," New Zealand Economic Papers, Taylor & Francis Journals, vol. 38(1), pages 21-47.
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    9. Guyonne Kalb & Rosanna Scutella & Hsein Kew, 2002. "Estimation of Wage Equations in Australia: Allowing for Censored Observations of Labour Supply," Melbourne Institute Working Paper Series wp2002n26, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
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