Search Results

Title: Decomposing Wage Variation: A Comment on Michael P. Keane's "Individual Heterogeneity and Interindustry Wage Differentials"
Resulting in 1 citation.
1. Blackburn, McKinley L.
Decomposing Wage Variation: A Comment on Michael P. Keane's "Individual Heterogeneity and Interindustry Wage Differentials"
Journal of Human Resources 30,4 (September 1995): 853-860.
Also: http://www.jstor.org/stable/146235
Cohort(s): NLSY79
Publisher: University of Wisconsin Press
Keyword(s): Heterogeneity; Wage Differentials; Wage Equations; Wage Theory

(Response to Michael Keane Article on Journal of Human Resources, Vol. 28, P. 134, 1993.) Michael P. Keane (1993) uses panel data to control for the effects of time-invariant individual characteristics when estimating the effects of industry on wages. He concludes that these individual effects can account for 84 percent of the industry-associated variation found in typical cross-section studies. The author argues that this conclusion is based on a misleading wage variance decomposition that would tend to overstate the importance of individual effects. A reconsideration of Keane's results shows that his estimates are of a similar magnitude to those of earlier studies that attempt to control for individual ability.
Bibliography Citation
Blackburn, McKinley L. "Decomposing Wage Variation: A Comment on Michael P. Keane's "Individual Heterogeneity and Interindustry Wage Differentials"." Journal of Human Resources 30,4 (September 1995): 853-860.