Bias in Longitudinal Estimation of Wage Gaps
15 Pages Posted: 28 Dec 2006 Last revised: 31 Aug 2010
Date Written: June 1986
Cross-sectional regression analyses of wage gaps may be biased by omission of unobserved worker characteristics. Recent studies therefore have used longitudinal data to "difference out" the effects of such variables. This paper. however. shows that self-selection of job changers may cause longitudinal estimation of wage gaps to be inconsistent.
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