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Title: A New Approach for Measuring Wage Ignorance in the Labor Market
Resulting in 1 citation.
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Hofler, Richard A. Polachek, Solomon W. |
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A New Approach for Measuring Wage Ignorance in the Labor Market Journal of Economics and Business 37,3 (August 1985): 267-276. Also: http://www.sciencedirect.com/science/article/pii/0148619585900220 Cohort(s): Older Men Publisher: Temple University Press Keyword(s): Education; Job Search; Racial Equality/Inequality; Rural/Urban Differences; Unions; Urban and Regional Planning; Wages; Work Experience A new econometric approach is presented for the evaluation of information content within labor markets. Ignorance is defined as the difference between the wage (price) individuals earn (pay) with complete information and the wage (price) they actually receive (pay) given their limited information stocks. A frontier production function approach is employed to measure ignorance for various markets. Data were obtained from the NLS of Older Men and was limited to those subjects employed in 1971 and meeting other criteria, leaving a sample of 219 men. The empirical results are highly consistent with the analytic results of search theory. Specifically, labor market ignorance appears to be greater among blacks than whites, greater in rural than urban areas, and greater among those with more risk aversion, higher opportunity costs of search, and lower levels of education and job experience. In addition, union membership is found to drastically reduce labor market ignorance, suggesting a new interpretation of the role of unions. |
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Bibliography Citation
Hofler, Richard A. and Solomon W. Polachek. "A New Approach for Measuring Wage Ignorance in the Labor Market." Journal of Economics and Business 37,3 (August 1985): 267-276.
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