Does measurement error bias fixed-effects estimates of the union wage effect?
Does measurement error bias fixed-effects estimates of the union wage effect?
This paper compares estimates of the union wage effect using cross-section and panel estimators for male manual full-time and female employees using data from the British Household Panel Survey, 1991-1997. A comparison of cross-section and panel estimates suggests that unobserved heterogeneity biases cross-section estimates upwards. However, it is also found that the divergence between estimates is overstated because measurement error biases the fixed-effects estimates downward. Reducing measurement error in the union variable by taking averages and restricting changes in union status to occur only when a change in employer and/or job takes place increases fixed-effects estimates of the union wage effect.
437-457
Swaffield, J.K.
9e0d6fe1-3219-4d1c-8cff-52c7fac1568f
1 September 2001
Swaffield, J.K.
9e0d6fe1-3219-4d1c-8cff-52c7fac1568f
Swaffield, J.K.
(2001)
Does measurement error bias fixed-effects estimates of the union wage effect?
Oxford Bulletin of Economics and Statistics, 63 (4), .
(doi:10.1111/1468-0084.00228).
Abstract
This paper compares estimates of the union wage effect using cross-section and panel estimators for male manual full-time and female employees using data from the British Household Panel Survey, 1991-1997. A comparison of cross-section and panel estimates suggests that unobserved heterogeneity biases cross-section estimates upwards. However, it is also found that the divergence between estimates is overstated because measurement error biases the fixed-effects estimates downward. Reducing measurement error in the union variable by taking averages and restricting changes in union status to occur only when a change in employer and/or job takes place increases fixed-effects estimates of the union wage effect.
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Published date: 1 September 2001
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Local EPrints ID: 453678
URI: http://eprints.soton.ac.uk/id/eprint/453678
ISSN: 0305-9049
PURE UUID: 522c857a-0299-401e-9bb2-923e595dc98e
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Date deposited: 20 Jan 2022 17:45
Last modified: 17 Mar 2024 04:09
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