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An empirical derivation of the industry wage equation

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Listed author(s):
  • Mason, Patrick L.

Abstract

This paper utilizes the Box-Cox transformation of variables technique to empirically derive an industry wage equation. Section I presents the determinants of potential wage differentials between and within industries. Section II estimates a Box-Cox industry wage equation. Likelihood ratio tests on alternative specifications of this equation affirm that competitive structure is a significant determinant of the industry wage rate and that human capital specifications of the industry wage equation (for the manufacturing sector) are not statistically valid. Section III summarizes the results.

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File URL: https://mpra.ub.uni-muenchen.de/11325/1/MPRA_paper_11325.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 11325.

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Date of creation: 1994
Publication status: Published in Journal of Quantitative Economics 1.10(1994): pp. 155-170
Handle: RePEc:pra:mprapa:11325
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Web page: https://mpra.ub.uni-muenchen.de

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Keywords: Box-Cox; functional form; wage equation; labor market inequality; efficiency wage;

Find related papers by JEL classification:

  • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
  • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
  • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

References listed on IDEAS
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  1. Seaks, Terry G & Layson, Stephen K, 1983. "Box-Cox Estimation with Standard Econometric Problems," The Review of Economics and Statistics, MIT Press, vol. 65(1), pages 160-164, February.
  2. Hardle, Wolfgang & Linton, Oliver, 1986. "Applied nonparametric methods," Handbook of Econometrics,in: R. F. Engle & D. McFadden (ed.), Handbook of Econometrics, edition 1, volume 4, chapter 38, pages 2295-2339 Elsevier.
  3. Gunderson, Morley, 1989. "Male-Female Wage Differentials and Policy Responses," Journal of Economic Literature, American Economic Association, vol. 27(1), pages 46-72, March.
  4. Erica L. Groshen, 1988. "Why do wages vary among employers?," Economic Review, Federal Reserve Bank of Cleveland, issue Q I, pages 19-38.
  5. Mason, Patrick L, 1995. "Race, Competition and Differential Wages," Cambridge Journal of Economics, Oxford University Press, vol. 19(4), pages 545-567, August.
  6. William T. Dickens & Lawrence F. Katz, 1986. "Interindustry Wage Differences and Industry Characteristics," NBER Working Papers 2014, National Bureau of Economic Research, Inc.
  7. Hardle, Wolfgang & Linton, Oliver, 1986. "Applied nonparametric methods," Handbook of Econometrics,in: R. F. Engle & D. McFadden (ed.), Handbook of Econometrics, edition 1, volume 4, chapter 38, pages 2295-2339 Elsevier.
  8. Charles Brown, 1980. "Equalizing Differences in the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 94(1), pages 113-134.
  9. White, Halbert & Olson, Lawrence, 1981. "Conditional distributions of earnings, wages and hours for blacks and whites," Journal of Econometrics, Elsevier, vol. 17(3), pages 263-285, December.
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Cited by:

  1. Eva Katalin Polgar & Julia Woerz, 2011. "Trade With Central and Eastern Europe: Is It Really a Threat to Wages in the West?," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 1, pages 1-31, March.
  2. Tsoulfidis, Lefteris & Tsaliki, Persefoni, 2011. "Classical competition and regulating capital: theory and empirical evidence," MPRA Paper 51334, University Library of Munich, Germany, revised 2013.
  3. repec:onb:oenbwp:y:2009:i:1:b:1 is not listed on IDEAS

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