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The Effects of Distributional Assumptions on the Full-time and Part-time Wage Differentials

Author

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  • John Baffoe-Bonnie

Abstract

The extent to which the distribution of the disturbance term in the estimated wage equation affects the wage differential between full-time and part-time workers is examined in this paper. Adopting a switching regression model with known sample selection, I found that the normality assumption generates larger wage estimates than the estimates of the non-normal distributions. The results indicate that the Normal distribution produces the larger wage differentials than the Non-normal distributions. Also, regardless of distributional assumption, differences in full-time and part-time characteristics account for a larger portion of the full-time and part-time wage differentials. The empirical message derived from this study is that, studies that rely solely on the normality assumption may not provide a true picture of the size of the estimated wage gap between full-time and part-time workers. In general, the study seems to suggest that the estimated wage differential between groups such as male-female and white-black under the normality assumption may be overstated. Â JEL classification numbers: J31, J22, J23, J20.

Suggested Citation

  • John Baffoe-Bonnie, 2026. "The Effects of Distributional Assumptions on the Full-time and Part-time Wage Differentials," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 16(2), pages 1-1.
    • Handle: RePEc:spt:admaec:v:16:y:2026:i:2:f:16_2_1
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    Keywords

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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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