A Reexamination of Public-Sector Wage Differentials in the United States: Evidence from the Nlsy with Geocode
25 Pages Posted: 10 May 2004
While many researchers have sought to estimate federal-private wage differentials in the United States, most of them ignore the issues of unobserved heterogeneity and selectivity among sectors. This article seeks to fill the gap in previous literature by using a more appropriate data set and several compelling techniques. The main results suggest substantial bias in ordinary least squares (OLS) estimates of federal-private wage differentials due to individual heterogeneity and self-selection. The direction of bias under selectivity correction (upward for men and downward for women) is consistent with results from both test-score approach estimates and the fixed-effects estimates.
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