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Title: Individual Heterogeneity and Interindustry Wage Differentials
Resulting in 1 citation.
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Keane, Michael P. |
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Individual Heterogeneity and Interindustry Wage Differentials Journal of Human Resources 28,1 (Winter 1993): 134-161. Also: http://www.jstor.org/stable/146091 Cohort(s): Young Men Publisher: University of Wisconsin Press Keyword(s): Heterogeneity; Modeling, Fixed Effects; Wage Differentials; Wage Theory Estimates of interindustry wage differentials are obtained using a fixed-effects estimator on a long panel, the National Longitudinal Survey of Young Men (NLS). After controlling for observable worker characteristics, 84 percent of the residual variance of log wages across industries is explained by individual fixed effects. Only 16 percent of the residual variance is "explained" by industry dummies. Since no controls for specific job characteristics are used, job characteristics that vary across industries could potentially explain this rather small residual across-industry log wage variance that is not attributable to individual effects. Clearly, then, these data do not force us to resort to noncompetitive explanations of interindustry wage differentials, such as efficiency wage theory. Furthermore, efficiency wage theories predict that wages in efficiency wage paying (or primary) industries should be relatively rigid. Therefore, industry wage differentials should widen in recessions. However, no such tendency is found in the data. (ABI/Inform) |
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Bibliography Citation
Keane, Michael P. "Individual Heterogeneity and Interindustry Wage Differentials." Journal of Human Resources 28,1 (Winter 1993): 134-161.
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