Making use of performance data for baseball players, this article provides empirical evidence in support of Lazear's (1998) theoretical predictions that (1) risky workers will earn a premium for their upside potential, (2) this risk premium will be higher the longer a worker's work life, and (3)...

Abstract This paper considers the use of multiple proxy measures for an unobserved variable and contrasts the approach taken in the measurement error literature to that of the model specification literature. We find that including all available proxy variables in the regression minimizes the...