Work experience as a source of specification error in earnings models: implications for gender wage decompositions
This paper models the bias from using potential vs actual experience in log wage models. The nature of the problem is best viewed as specification error as opposed to classical errors-in-variables.We correct for the discrepancy between potential and actual work experience and create a predicted measure of work experience. We use the 1979 National Longitudinal Survey of Youth and the Panel Study of Income Dynamics and extend our findings to the Integrated Public Use Microdata Sample. Our results suggest that potential experience biases the effects of schooling and the rates of return to labor market experience. Using such a measure in earnings models underestimates the explained portion of the male–female wage gap.We are able to separately identify the decomposition biases associated with incorrect experience measures and biased parameter estimates.
(This abstract was borrowed from another version of this item.)
Volume (Year): 22 (2009)
Issue (Month): 2 (April)
|Contact details of provider:|| Web page: http://www.springer.com|
More information through EDIRC
|Order Information:||Web: http://www.springer.com/economics/population/journal/148/PS2|
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.:
- Heather Antecol & Kelly Bedard, 2002.
"The Relative Earnings of Young Mexican, Black, and White Women,"
Cornell University, ILR School, vol. 56(1), pages 122-135, October.
- Heather Antecol & Kelly Bedard, "undated". "The Relative Earnings of Young Mexican, Black, and White Women," Claremont Colleges Working Papers 1999-02, Claremont Colleges.
- Ronald Oaxaca & Michael Ransom, 2003. "Using Econometric Models for Intrafirm Equity Salary Adjustments," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 1(3), pages 221-249, December.
- Murphy, Kevin M & Welch, Finis, 1990. "Empirical Age-Earnings Profiles," Journal of Labor Economics, University of Chicago Press, vol. 8(2), pages 202-229, April.
- Mincer, Jacob & Polachek, Solomon, 1974. "Family Investment in Human Capital: Earnings of Women," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 76-108, Part II, .
- Jacob Mincer & Solomon Polacheck, 1974. "Family Investments in Human Capital: Earnings of Women," NBER Chapters,in: Economics of the Family: Marriage, Children, and Human Capital, pages 397-431 National Bureau of Economic Research, Inc.
- Jacob Mincer & Solomon Polachek, 1974. "Family Investments in Human Capital: Earnings of Women," NBER Chapters,in: Marriage, Family, Human Capital, and Fertility, pages 76-110 National Bureau of Economic Research, Inc.
- Blau, Francine D & Kahn, Lawrence M, 1996. "Wage Structure and Gender Earnings Differentials: An International Comparison," Economica, London School of Economics and Political Science, vol. 63(250), pages 29-62, Suppl..
- Heather Antecol & Kelly Bedard, 2004. "The Racial Wage Gap: The Importance of Labor Force Attachment Differences across Black, Mexican, and White Men," Journal of Human Resources, University of Wisconsin Press, vol. 39(2).
- Heather Antecol & Kelly Bedard, 2001. "The Racial Wage Gap: The Importance of Labor Force Attachment Differences Across Black, Mexican and White Men," Claremont Colleges Working Papers 2001-35, Claremont Colleges.
- Behrman, Jere R. & Rosenzweig, Mark R., 1999. ""Ability" biases in schooling returns and twins: a test and new estimates," Economics of Education Review, Elsevier, vol. 18(2), pages 159-167, April.
- Bound, John & Solon, Gary, 1999. "Double trouble: on the value of twins-based estimation of the return to schooling," Economics of Education Review, Elsevier, vol. 18(2), pages 169-182, April.
- John Bound & Gary Solon, 1998. "Double Trouble: On the Value of Twins-Based Estimation of the Return to Schooling," NBER Working Papers 6721, National Bureau of Economic Research, Inc.
- Bound, John, et al, 1994. "Evidence on the Validity of Cross-Sectional and Longitudinal Labor Market Data," Journal of Labor Economics, University of Chicago Press, vol. 12(3), pages 345-368, July. Full references (including those not matched with items on IDEAS)