Estimation of an Occupational Choice Model when Occupations are Misclassified
This paper examines occupational choices using a discrete choice model that accounts for the fact that self-reported occupation data is measured with error. Despite evidence from validation studies which suggests that there is a substantial amount of measurement error in self-reported occupations, existing research has not corrected for classification error when estimating models of occupational choice. This paper develops a panel data model of occupational choices that corrects for misclassification in occupational choices and measurement error in occupation-specific work experience variables. The model is used to estimate the extent of measurement error in self-reported occupation data and quantify the bias that results from ignoring measurement error in occupation codes when studying the determinants of occupational choices and estimating the effects of occupation-specific human capital on wages. The parameter estimates reveal that 9% of occupational choices in the 1979 cohort of the National Longitudinal Survey of Youth are misclassified. Ignoring misclassification biases the median parameter in the occupational choice model by 25%.
|Date of creation:||Nov 2006|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
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.:
- Steven Stern & Victor Lavy & Michael Palumbo, 1998. "Simulation of Multinomial Probit Probabilities and Imputation of Missing Data," Virginia Economics Online Papers 388, University of Virginia, Department of Economics.
- Heckman, James J & Sedlacek, Guilherme, 1985. "Heterogeneity, Aggregation, and Market Wage Functions: An Empirical Model of Self-selection in the Labor Market," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1077-1125, December.
- Michael P. Keane & Kenneth I. Wolpin, 1995.
"The career decisions of young men,"
559, Federal Reserve Bank of Minneapolis.
- Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-93, March.
- Tong Li & Pravin K. Trivedi & Jiequn Guo, 2003. "Modeling Response Bias in Count: A Structural Approach With an Application to the National Crime Victimization Survey Data," Sociological Methods & Research, , vol. 31(4), pages 514-544, May.
- Hausman, J. A. & Abrevaya, Jason & Scott-Morton, F. M., 1998. "Misclassification of the dependent variable in a discrete-response setting," Journal of Econometrics, Elsevier, vol. 87(2), pages 239-269, September.
- Derek Neal, 1998.
"The Complexity of Job Mobility Among Young Men,"
NBER Working Papers
6662, National Bureau of Economic Research, Inc.
- Iourii Manovskii & Gueorgui Kambourov, 2004.
"Occupational Specificity of Human Capital,"
2004 Meeting Papers
197, Society for Economic Dynamics.
- Keane, Michael P, 1994. "A Computationally Practical Simulation Estimator for Panel Data," Econometrica, Econometric Society, vol. 62(1), pages 95-116, January.
- Jason ABREVAYA & Jerry A. HAUSMAN, 1999. "Semiparametric Estimation with Mismeasured Dependent Variables: An Application to Duration Models for Unemployment Spells," Annals of Economics and Statistics, GENES, issue 55-56, pages 243-275.
- Abowd, John M & Zellner, Arnold, 1985. "Estimating Gross Labor-Force Flows," Journal of Business & Economic Statistics, American Statistical Association, vol. 3(3), pages 254-83, June.
- John Pepper & Brent Kreider, 2001.
"Inferring Disability Status from Corrupt Data,"
Virginia Economics Online Papers
354, University of Virginia, Department of Economics.
- Eric D. Gould, 2002. "Rising Wage Inequality, Comparative Advantage, and the Growing Importance of General Skills in the United States," Journal of Labor Economics, University of Chicago Press, vol. 20(1), pages 105-147, January.
- Bollinger, Christopher R., 1996. "Bounding mean regressions when a binary regressor is mismeasured," Journal of Econometrics, Elsevier, vol. 73(2), pages 387-399, August.
- Todd Stinebrickner & Ralph Stinebrickner, 2001.
"Time Use and College Outcomes,"
University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers
20012, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
- Xiaohong Chen & Han Hong & Elie Tamer, 2005. "Measurement Error Models with Auxiliary Data," Review of Economic Studies, Oxford University Press, vol. 72(2), pages 343-366.
- Thierry Magnac & Michael Visser, 1998.
"Transition Models with Measurement Errors,"
98-22, Centre de Recherche en Economie et Statistique.
- Douglas, Stratford M & Conway, Karen Smith & Ferrier, Gary D, 1995. "A Switching Frontier Model for Imperfect Sample Separation Information: With an Application to Constrained Labor Supply," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(2), pages 503-29, May.
- Neal, Derek, 1995. "Industry-Specific Human Capital: Evidence from Displaced Workers," Journal of Labor Economics, University of Chicago Press, vol. 13(4), pages 653-77, October.
- Christian Dustmann & Arthur van Soest, 2001.
"Language Fluency And Earnings: Estimation With Misclassified Language Indicators,"
The Review of Economics and Statistics,
MIT Press, vol. 83(4), pages 663-674, November.
- Dustmann, C. & van Soest, A.H.O., 1998. "Language Fluency and Earnings : Estimation with Misclassified Language Indicators," Discussion Paper 1998-120, Tilburg University, Center for Economic Research.
- Sullivan, Paul, 2010.
"Empirical evidence on occupation and industry specific human capital,"
Elsevier, vol. 17(3), pages 567-580, June.
- Sullivan, Paul, 2006. "Empirical Evidence on Occupation and Industry Specific Human Capital," MPRA Paper 863, University Library of Munich, Germany.
- Parent, Daniel, 2000. "Industry-Specific Capital and the Wage Profile: Evidence from the National Longitudinal Survey of Youth and the Panel Study of Income Dynamics," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 306-23, April.
- Kreider, Brent & Pepper, John V., 2007.
"Disability and Employment: Reevaluating the Evidence in Light of Reporting Errors,"
Journal of the American Statistical Association,
American Statistical Association, vol. 102, pages 432-441, June.
- Kreider, Brent & Pepper, John V., 2003. "Disability and Employment: Reevaluating the Evidence in Light of Reporting Errors," Staff General Research Papers 10229, Iowa State University, Department of Economics.
- Mellow, Wesley & Sider, Hal, 1983. "Accuracy of Response in Labor Market Surveys: Evidence and Implications," Journal of Labor Economics, University of Chicago Press, vol. 1(4), pages 331-44, October.
- Brian P. McCall, 1988.
"Occupational Matching: A Test of Sorts,"
617, Princeton University, Department of Economics, Industrial Relations Section..
- Todd R. Stinebrickner, 1999. "Estimation Of A Duration Model In The Presence Of Missing Data," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 529-542, August.
- Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
- Ramalho, Esmeralda A., 2002. "Regression models for choice-based samples with misclassification in the response variable," Journal of Econometrics, Elsevier, vol. 106(1), pages 171-201, January.
- Mroz, Thomas A., 1999. "Discrete factor approximations in simultaneous equation models: Estimating the impact of a dummy endogenous variable on a continuous outcome," Journal of Econometrics, Elsevier, vol. 92(2), pages 233-274, October.
- Keane, Michael P. & Sauer, Robert M., 2006.
"Classification Error in Dynamic Discrete Choice Models: Implications for Female Labor Supply Behavior,"
IZA Discussion Papers
2332, Institute for the Study of Labor (IZA).
- Michael P. Keane & Robert M. Sauer, 2009. "Classification Error in Dynamic Discrete Choice Models: Implications for Female Labor Supply Behavior," Econometrica, Econometric Society, vol. 77(3), pages 975-991, 05.
- Heckman, James J & Sedlacek, Guilherme L, 1990. "Self-selection and the Distribution of Hourly Wages," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages S329-63, January.
- Poterba, James M & Summers, Lawrence H, 1995. "Unemployment Benefits and Labor Market Transitions: A Multinomial Logit Model with Errors in Classification," The Review of Economics and Statistics, MIT Press, vol. 77(2), pages 207-16, May.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:862. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.