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A Reexamination of Public‐Sector Wage Differentials in the United States: Evidence from the NLSY with Geocode
Author(s) -
Lee SangHyop
Publication year - 2004
Publication title -
industrial relations: a journal of economy and society
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.61
H-Index - 57
eISSN - 1468-232X
pISSN - 0019-8676
DOI - 10.1111/j.0019-8676.2004.00338.x
Subject(s) - ordinary least squares , wage , economics , selection bias , private sector , geocoding , econometrics , demographic economics , set (abstract data type) , labour economics , statistics , geography , mathematics , economic growth , remote sensing , computer science , programming language
While many researchers have sought to estimate federal‐private wage differentials in the United States, most of them ignore the issues of unobserved heterogeneity and selectivity among sectors. This article seeks to fill the gap in previous literature by using a more appropriate data set and several compelling techniques. The main results suggest substantial bias in ordinary least squares (OLS) estimates of federal‐private wage differentials due to individual heterogeneity and self‐selection. The direction of bias under selectivity correction (upward for men and downward for women) is consistent with results from both test‐score approach estimates and the fixed‐effects estimates.