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The Cohort Size‐Wage Relationship in Europe
Author(s) -
Moffat John,
Roth Duncan
Publication year - 2016
Publication title -
labour
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.403
H-Index - 34
eISSN - 1467-9914
pISSN - 1121-7081
DOI - 10.1111/labr.12081
Subject(s) - cohort , wage , demographic economics , cohort effect , positive selection , demography , instrumental variable , selection (genetic algorithm) , secondary education , cohort study , economics , geography , psychology , labour economics , econometrics , statistics , biology , sociology , biochemistry , mathematics education , mathematics , artificial intelligence , computer science , gene
This paper estimates the impact of cohort size on wages using data on young males in European regions covering 2004–10. The effect of cohort size on wages is identified through an instrumental variables strategy which, in contrast to previous analyses of European data, addresses self‐selection into geographical areas as well as into educational groups. The results suggest that cohort size has a significant negative effect on male wages for individuals with secondary education — the largest group — but not for individuals with less than secondary education or tertiary education. This effect is underestimated if self‐selection into geographical areas is not addressed.