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Author: Macieira, João
Resulting in 1 citation.
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Ge, Suqin Macieira, João |
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Unobserved Worker Quality and Inter-Industry Wage Differentials Journal of Industrial Economics published online (14 November 2023). Also: https://onlinelibrary.wiley.com/doi/10.1111/joie.12361 Cohort(s): NLSY79 Publisher: Wiley Online Keyword(s): Labor Demand; Labor Economics; Wage Differentials; Wages; Willingness to Pay (WTP); Worker Productivity; Worker Quality; Workers Ability Permission to reprint the abstract has not been received from the publisher. This study quantitatively assesses two alternative explanations for inter-industry wage differentials: worker heterogeneity in the form of unobserved quality and firm heterogeneity in the form of a firm's willingness to pay (WTP) for workers' productive attributes. Building on hedonic models of differentiated product demand, we develop an empirical hedonic model of labor demand and apply a two-stage nonparametric procedure to recover worker and firm heterogeneities. In the first stage we recover unmeasured worker quality by estimating market-specific hedonic wage functions nonparametrically. In the second stage we infer each firm's WTP parameters for worker attributes by using first-order conditions from the demand model. We apply our approach to quantify inter-industry wage differentials on the basis of individual data from the NLSY79 and find that worker quality accounts for approximately two thirds of the inter-industry wage differentials. |
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Bibliography Citation
Ge, Suqin and João Macieira. "Unobserved Worker Quality and Inter-Industry Wage Differentials." Journal of Industrial Economics published online (14 November 2023).
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