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Title: Predicted vs. Potential Work Experience in an Earnings Function for Young Women
Resulting in 1 citation.
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Garvey, Nancy Reimers, Cordelia |
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Predicted vs. Potential Work Experience in an Earnings Function for Young Women Research in Labor Economics 3 (1980): 99-127 Cohort(s): Young Women Publisher: JAI Press, Inc. Keyword(s): Children; Current Population Survey (CPS) / CPS-Fertility Supplement; Earnings; Health Factors; Marriage; Schooling; Work Experience When an earnings function is estimated and data on actual work experience are unavailable, potential work experience--age minus educational attainment minus 5 (or 6)--is often substituted for actual experience. This paper explores the biases introduced by this procedure and proposes that predicted experience, based on demographic information, be used instead. Using NLS data, we estimate a predicting equation, by both OLS and Tobit methods, for women under age 30. We then compare the estimated earnings functions using potential, predicted, and actual work experience, and we find that the coefficients estimated using potential experience differ substantially from those estimated using either predicted or actual experience, whereas the latter are very close together. Moreover, the bias introduced by using potential experience varies by race. |
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Bibliography Citation
Garvey, Nancy and Cordelia Reimers. "Predicted vs. Potential Work Experience in an Earnings Function for Young Women." Research in Labor Economics 3 (1980): 99-127.
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