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The Wage Curve, Once More with Feeling: Bayesian Model Averaging of Heckit Models

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  • Rolando Gonzales Martinez

    (School of Business and Law, University of Agder, Norway)

Abstract

The sensitivity of the wage curve to sample-selection and model uncertainty was evaluated with Bayesian methods. More than 8000 Heckit wage curves were estimated using data from the 2017 household survey of Bolivia. After averaging the estimates with the posterior probability of each model being true, the wage curve elasticity in Bolivia is close to -0.01. This result suggests that in this country the wage curve is inelastic and does not follow the international statistical regularity of wage curves.

Suggested Citation

  • Rolando Gonzales Martinez, 2018. "The Wage Curve, Once More with Feeling: Bayesian Model Averaging of Heckit Models," Econometric Research in Finance, SGH Warsaw School of Economics, Collegium of Economic Analysis, vol. 3(2), pages 79-92, December.
  • Handle: RePEc:sgh:erfinj:v:3:y:2018:i:2:p:79-92
    DOI: 10.33119/ERFIN.2018.3.2.1
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    References listed on IDEAS

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    More about this item

    Keywords

    model uncertainty; Bayesian model averaging; wage curve;
    All these keywords.

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • D00 - Microeconomics - - General - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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