On the Specification of Mincerian Wage Regressions with Heterogeneity, Non-Linearity, Non-Separability, and Heteroskedasticity

SummaryUsing data from the German Socioeconomic Panel (GSOEP), the study analyzes the direct and indirect effects of parental background on employees' earnings. To examine indirect effects we estimate the determinants of the employees' years of schooling. In a second step, we run wage regressions to examine direct effects. Our results suggest that the direct and indirect effects of parental background driving the intergenerational correlation of socioeconomic status are complex. It is not only important to differentiate between mother's and father's education. It is also important to take into account other parental characteristics such as maternal labor force participation and the parents' occupational status and fertility. Moreover, we find that interaction effects play an important role. The returns to schooling depend on the employees' parental background.

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The Individual Benefits of Investing in Skills

10.1093/oxfordhb/9780199655366.013.17 ◽

2017 ◽

Author(s):

Craig Holmes

Keyword(s):

Formal Education ◽

Capital Theory ◽

Wage Returns ◽

Wage Regressions ◽

General Skills ◽

The Individual ◽

Fixed Distribution ◽

Training Programmes ◽

Marginal Returns ◽

Ability Bias

This chapter considers returns to the individual from investing in skill. It describes the earnings and employment outcomes of people who have completed different levels of formal education across different countries, and goes on to consider the possible causal mechanisms at work. The methodology for estimating wage returns is critically discussed. Whilst much attention has been devoted to considering ability bias, other issues have received less attention. In particular qualifications or amounts of time spent studying are imperfect proxies for skills produced. Furthermore estimates from wage regressions are almost invariably interpreted through the lens of human capital theory -- the existence of a wage premium indicates that the productivity has increased due to the educational investment. Alternative interpretations are considered. These include the possibility that the premium represents a reward for obtaining a job on a fixed distribution of jobs -- in other words winning a positional competition race. Such possibilities raise several concerns. These include under-utilisation, both of general skills and of skills acquired through work-based training programmes, low marginal returns relative to average returns, and a widening and more risky distribution of payoffs.

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Registered Nurses and the Value of Bilingualism

ILR Review ◽

10.1177/001979390505900106 ◽

2005 ◽

Vol 59 (1) ◽

pp. 101-118 ◽

Cited By ~ 9

Author(s):

David E. Kalist

Keyword(s):

Registered Nurses ◽

Health Care Providers ◽

The United States ◽

National Sample ◽

Sample Survey ◽

Hispanic Population ◽

Care Providers ◽

Wage Premiums ◽

Wage Regressions ◽

Year 2000

Recent research indicates that markets do not value bilingual skills. These results, however, are not robust across all labor markets, and one notable counter-instance is the market for registered nurses. As the Hispanic population grows in the United States, health care providers will encounter increasing numbers of patients who are not fluent in English. To better serve their patients, meet government requirements, and limit legal liability, employers may offer wage premiums to attract bilingual (Spanish/English) registered nurses. Support for this hypothesis comes from wage regressions on data for the year 2000 from the National Sample Survey of Registered Nurses. The estimates indicate that bilingual registered nurses received wage premiums of up to 7%, depending on the fraction of the population that spoke Spanish in the RN's county of employment.

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Career interruptions and current remuneration

International Journal of Manpower ◽

10.1108/ijm-05-2018-0142 ◽

2019 ◽

Vol 40 (5) ◽

pp. 850-878

Author(s):

Benedikt Gerst ◽

Christian Grund

Keyword(s):

Middle Managers ◽

Parental Leave ◽

Content Type ◽

Career Interruptions ◽

Bonus Payments ◽

Wage Regressions ◽

And Gender ◽

Salary Survey ◽

Wage Increases

Purpose Career interruptions of employees imply important issues for both firms and individuals, including a possibly lower compensation after returning to a job. Different compensation components are explored, as bonus payments frequently complement fixed salaries for many employees, making various channels of lower compensation possible. This paper aims to discuss this issue. Design/methodology/approach This study is based on a yearly salary survey among a rather homogeneous group of professionals and middle managers from the German chemical sector, which contains detailed information on compensation components next to individual and job characteristics. The incidence and duration of past career interruptions act as the most important independent variables. Mincer-type wage regressions are complemented by estimations on wage increases. Findings The results show that career interruptions are more related to lower subsequent bonus payments than they are to fixed salaries. Furthermore, interruptions caused by unemployment are associated with higher interruption pay gaps than those resulting from other reasons such as parental leave. The results even hint for catch-up effects following parental leave with regard to higher wage increases compared to individuals without interruptions. Career interruptions are more prevalent for female managers offering an explanation for a considerable part of gender pay gaps. Wage losses after career interruptions are more pronounced for male employees than they are for females, though. Originality/value This study extents the literature by disentangling the relation of career interruptions and different compensation components, bonus payments next to fixed salaries in particular. The role of interruption type and gender are also taken into account so that the paper deepens the understanding of the role of past career interruptions for employees’ remuneration.

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Wages Over the Course of Structural Transformation: Evidence from India

Asian Development Review ◽

10.1162/adev_a_00134 ◽

2019 ◽

Vol 36 (2) ◽

pp. 131-158

Author(s):

Rana Hasan ◽

Rhea Molato

Keyword(s):

Labor Force ◽

Survey Data ◽

Structural Transformation ◽

Urban Areas ◽

Formal Sector ◽

Labor Force Survey ◽

Wage Regressions ◽

Wage Employment ◽

Big Cities

This paper uses labor force survey data from India for 2000 and 2012 to examine how wages behave over the course of structural transformation. We find that wage employment between 2000 and 2012 displays the patterns one would expect for an economy undergoing structural transformation, with employment shares shifting from agriculture to industry and services, and from rural to urban areas and larger cities within urban areas. These shifts, as well as a shift to nonroutine occupations and routine manual occupations outside of agriculture, are associated with an improvement in average wages. Finally, simple Mincerian wage regressions confirm that jobs in larger firms and big cities are associated with significantly higher wages—even more so for women. Overall, our results are consistent with the notion that policies that encourage the expansion of the formal sector and employment in larger firms are crucial for development.

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Good business practices improve productivity in Myanmar’s manufacturing sector: Evidence from two matched employer–employee surveys

10.35188/unu-wider/2021/983-9 ◽

2021 ◽

Author(s):

Paolo Falco ◽

Henrik Hansen ◽

John Rand ◽

Finn Tarp ◽

Neda Trifković

Keyword(s):

Development Strategy ◽

Manufacturing Sector ◽

Value Added ◽

Medium Size ◽

Business Practices ◽

Private Sector Development ◽

Wage Regressions ◽

Modern Business ◽

Employee Information ◽

Entrepreneurial Training

We look into the relationship between business practices and enterprise productivity using panel data with matched employer and employee information from Myanmar. The data show that micro, small, and medium-size enterprises in Myanmar typically do only a few modern business practices. Even so, through estimates of value-added functions and labour demand relations we find a positive and economically important association between business practices and productivity. The results are confirmed when we utilize employer–employee information to estimate Mincer-type wage regressions. In combination, the value-added functions and the Mincer regressions show that at least half of the productivity gain from improved business practices stems from selection effects of employment of more productive workers. This sorting channel is important to keep in mind when supporting enterprises in Myanmar’s manufacturing sector through entrepreneurial training activities. While our results indicate that implementation of more structured business practices could be a key ingredient of a private sector development strategy in Myanmar, the full effect of such a strategy may take time to materialize. Moreover, entrepreneurial training should be accompanied by labour market initiatives aimed at improving productive matches of employers and employees.

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Intragenerational labor mobility in the Indian labor market

IZA Journal of Development and Migration ◽

10.2478/izajodm-2020-0006 ◽

2020 ◽

Vol 11 (1) ◽

Author(s):

Bhaskar Jyoti Neog ◽

Bimal Kishore Sahoo

Keyword(s):

Logistic Regression ◽

Labor Mobility ◽

Family Background ◽

Multinomial Logistic Regression ◽

Paid Work ◽

Mobility Patterns ◽

Transition Matrices ◽

Earnings Differentials ◽

Policy Suggestions ◽

Wage Regressions

AbstractThe present study contributes to the limited literature on labor mobility in India using the India Human Development Survey panel data for the years 2004–2005 and 2011–2012. We use three different tools, viz., transition matrices, multinomial logistic regression, and wage regressions for this study. The results show significant mobility across sectors in the economy. Mobility patterns among workers are found to differ significantly along the lines of gender, caste, education, wealth, and family background, among others. There is a distress-driven movement of workers. Significant earnings differentials exist across paid work statuses. The paper concludes with some policy suggestions.

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