Robust Estimation of Wage Dispersion with Censored Data: An Application to Occupational Earnings Risk and Risk Attitudes

We present a semiparametric method to estimate group-level dispersion, which is particularly effective in the presence of censored data. We apply this procedure to obtain measures of occupation-specific wage dispersion using top-coded administrative wage data from the German IAB Employment Sample. We then relate these robust measures of earnings risk to the risk attitudes of individuals working in these occupations. We find that willingness to take risk is positively correlated with the wage dispersion of an individual’s occupation.

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Year of publication:	2020
Authors:	Pollmann, Daniel ; Dohmen, Thomas ; Palm, Franz
Published in:	De Economist. - New York, NY : Springer US, ISSN 1572-9982. - Vol. 168.2020, 4, p. 519-540
Publisher:	New York, NY : Springer US
Subject:	Dispersion estimation \| Earnings risk \| Censoring \| Quantile regression \| Occupational choice \| Sorting \| Risk preferences \| SOEP \| IABS

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Type of publication:	Article
Type of publication (narrower categories):	Article
Language:	English
Other identifiers:	10.1007/s10645-020-09374-x [DOI]
Classification:	C14 - Semiparametric and Nonparametric Methods ; C21 - Cross-Sectional Models; Spatial Models ; C24 - Truncated and Censored Models ; J24 - Human Capital; Skills; Occupational Choice; Labor Productivity ; J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc ; D01 - Microeconomic Behavior: Underlying Principles ; D81 - Criteria for Decision-Making under Risk and Uncertainty
Source:	EconStor

Persistent link: https://www.econbiz.de/10014503444