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Publication and Attenuation Biases in Measuring Skill Substitution

Author

Listed:
  • Tomas Havranek

    (Charles University and Centre for Economic Policy Research)

  • Zuzana Irsova

    (Charles University)

  • Lubica Laslopova

    (Anglo-American University)

  • Olesia Zeynalova

    (Charles University)

Abstract

A key parameter in the analysis of wage inequality is the elasticity of substitution between skilled and unskilled labor. We show that the empirical literature is consistent with both publication and attenuation bias in the estimated inverse elasticities. Publication bias, which exaggerates the mean reported inverse elasticity, dominates and results in corrected inverse elasticities closer to zero than the typically published estimates. The implied mean elasticity is 4, with a lower bound of 2. Elasticities are smaller for developing countries. To derive these results, we use nonlinear tests for publication bias and model averaging techniques that account for model uncertainty.

Suggested Citation

  • Tomas Havranek & Zuzana Irsova & Lubica Laslopova & Olesia Zeynalova, 2024. "Publication and Attenuation Biases in Measuring Skill Substitution," The Review of Economics and Statistics, MIT Press, vol. 106(5), pages 1187-1200, September.
  • Handle: RePEc:tpr:restat:v:106:y:2024:i:5:p:1187-1200
    DOI: 10.1162/rest_a_01227
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    Citations

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    Cited by:

    1. Ali Elminejad & Tomas Havranek & Roman Horvath & Zuzana Irsova, 2023. "Intertemporal Substitution in Labor Supply: A Meta-Analysis," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 51, pages 1095-1113, December.
    2. Zuzana Irsova & Hristos Doucouliagos & Tomas Havranek & T. D. Stanley, 2023. "Meta-Analysis of Social Science Research: A Practitioner´s Guide," Working Papers IES 2023/25, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Sep 2023.
    3. Josef Bajzik & Tomas Havranek & Zuzana Irsova & Jiri Novak, 2023. "Do Shareholder Activism Announcements Affect Stock Prices? A Meta-Analysis," Working Papers 2023/17, Czech National Bank.
    4. Matej Opatrny & Tomas Havranek & Zuzana Irsova & Milan Scasny, 2023. "Publication Bias and Model Uncertainty in Measuring the Effect of Class Size on Achievement," Working Papers IES 2023/19, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised May 2023.
    5. Anna Sokolova, 2023. "Marginal Propensity to Consume and Unemployment: a Meta-analysis," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 51, pages 813-846, December.
    6. Slichter, David & Tran, Nhan, 2023. "Do better journals publish better estimates?," MPRA Paper 118433, University Library of Munich, Germany.
    7. Sintos, Andreas, 2023. "Does inflation worsen income inequality? A meta-analysis," Economic Systems, Elsevier, vol. 47(4).

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