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Wage Dynamics and Unobserved Heterogeneity: Time Preference of Learning Ability? / Lalith Munasinghe, Nachum Sicherman.
- Format:
- Book
- Author/Creator:
- Munasinghe, Lalith.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w11031.
- NBER working paper series no. w11031
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Wage Dynamics and Unobserved Heterogeneity
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2005.
- Summary:
- A large portion of the variation in wages and wage growth rates among individuals is due to "unobserved" heterogeneity, and the source of individual heterogeneity is typically attributed to data limitations and/or the unobservability of certain productivity related factors. In this paper we develop a test that discriminates between two inherently unobservable sources of heterogeneity (both of which can clearly account for the variation in wages and wage growth rates): learning ability and workers' inter-temporal preferences (discounting). We apply this test to the large observed differences in wages and wage growth rates between smokers and non-smokers. The evidence supports the discounting hypothesis.
- Notes:
- Print version record
- January 2005.
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