Search results

Prior analyses of racial bias in the New York City’s Stop-and-Frisk program implicitly assumed that potential bias of police officers did not vary by crime type and that their decision of which type of crime to report as the basis for the stop did not exhibit any bias. In this paper, we first extend the hit rates model to consider crime type heterogeneity in racial bias and police officer decisions of reported crime type. Second, we reevaluate the program while accounting for heterogeneity in bias along crime types and for the sample selection which may arise from conditioning on crime type. We present evidence that differences in biases across crime types are substantial and specification tests support incorporating corrections for selective crime reporting. However, the main findings on racial bias do not differ sharply once accounting for this choice-based selection.

The purpose of this paper is to consider a new way of estimating the gender wage gap by introducing individual risk attitudes that is applied to representative Korean data.

The selection bias via risk attitudes results in the overestimation of this wage gap. Women are more risk averse and hence prefer not to be active in the labour market or, if they are active, prefer to work in the public sector, where wages are generally lower than in the private sector. This paper explains the reduced gender wage gap by developing an appropriate sample-selection model, with wage decompositions corrected for selection.

Self-selection based on risk attitudes is shown to partly explain the gap that is popularly perceived as reflecting gender discrimination.

It is the first attempt to explain the gender wage gap by looking at the individual risk preference through work status selection.

Rainy day stabilization funds (RDSFs) and local option sales taxes (LOSTs) are two strategies local governments deploy to combat fiscal stress. While the literature on both is robust, it has thus far failed to consider empirically that the two may be connected. One way the marginal LOST dollar could be spent is by saving it for future use. We test the connection with a sample of 414 counties and correct for selection bias with the Heckman correction technique. We find that each $10 increase in LOST revenue per capita is associated with a $0.10 increase in undesignated general fund balance. Though small, the positive effect size supports the theory that LOSTs contribute to a greater propensity to save.

The purpose of this paper is to examine the effects of changes in the relative composition and in the segmentation between formal and informal labour on earnings differentials among women over the last decade in Brazil.

The authors follow Machado and Mata’s method to decompose the changes along the earnings distribution, with correction for sample selection and using microdata from the Demographic Census of 2000 and 2010. Informal labour was divided into informal salaried labour and self-employment, and both groups were compared with the formal labour separately.

The results indicate that, in both cases, an increase in earnings differentials in the bottom of the earnings distribution due to segmentation, suggesting that the returns to formal labour have grown relatively to informal labour during the period. On the other hand, earnings differentials decrease as one moves up the earnings distribution due to the composition effect, which is stronger on the top of the distribution relatively to the bottom. Furthermore, there are compensating differentials for self-employed women above the 30th quantile, which contributed to reduce the inequality between this group and formal workers.

The paper contributes to a better understanding of the changes taking place in female labour, shedding some light on how they affect different points along the earnings distribution. Furthermore, the adopted approach proposes a new application for the correction of sample bias in the context of quantile regression by employing a logit multinomial, and using the Demographic Census data.

This work examines the returns to education for workers who pursue additional education after time out of the labor force. It compares those who remain in the labor force during additional education with those who drop out of the labor force during additional education. It compares two cohorts of the National Longitudinal Survey of Youth (NLSY).

This work utilizes a difference equation to estimate the returns to education for workers who pursue additional education after time spent out of school and in the labor force.

The results indicate a sheepskin return of approximately 14% for those who remain in the labor force and a return of approximately 9% to years of additional education for those who drop out of the labor force. This contrasting pattern of returns is robust to sample selection correction and a variety of checks.

This work does not fully account for all threats to causation. Further research could pursue these and make use of data from more clearly defined periods of education.

This work finds key differences between the internal labor market faced by those remaining in the labor force and the external labor market faced by those dropping out of the labor force. A policy focused on re-training workers should account for these differences.

This is the first work to compare workers who pursue additional education while remaining in the labor force to workers who pursue additional education and drop out of the labor force.

This paper aims to determine the characteristics of board certification among US physicians and to test whether accounting for the expected gains to certification alters the pattern of the determinants of board certification.

Splitting the sample into sub‐samples by characteristics associated with certification/non‐certification identified in a probit, the incremental gain to certification from log‐earnings equations is identified. Realizing that these methods are susceptible to sample selection, correction is made for it using the Heckman approach. Using the sample selection corrected equations, the expected gain to certification among those who certify is then predicted and those who do not certify is then predicted and this difference is included as a proxy for the expected gain in the original probit to ascertain whether including the expected gain alters the determinants of certification.

Accounting for the expected gain alters the pattern of the determinants of certification. Although some groups such as blacks appear less likely to certify, after accounting for their expected return to certification, they are not as less likely. This is explained in terms of the expected marginal return to certification, market structure and practice setting.

The data used in the analysis apply only to young physicians in the USA. Also, these results may be applicable only to the particular cohort used in this analysis.

The findings help to explain the absence of minority board certified physicians within the USA.

This paper is the first to simultaneously estimate the returns to physician board certification and the decision to obtain certification.

The purpose of this study is to examine the effects of health on wages of Australian workers, with a focus on gender differences and the role of macroeconomic conditions in the effects.

The first 15 waves of the Household, Income and Labour Dynamics in Australia survey are used to estimate a wage model that accounts for the endogeneity of health, unobserved heterogeneity and sample selection bias.

The results show that, after accounting for the endogeneity of health, unobserved heterogeneity and sample selection bias, better health increases wages for Australian male workers, but not for female workers. The results also show that accounting for the endogeneity of health, unobserved heterogeneity and potential sample selection bias is important in estimating the effects of health on wages. In particular, a simple ordinary least squares estimator would underestimate the effect of health on wages for males, while overestimate it for females, and simply addressing the endogeneity of health using instrumental variables could overestimate the effect for both genders. It is also found that the effects of health on wages fall under depressed macroeconomic conditions, perhaps due to reduced job mobility and increased presentism during a recession.

This study adds to the international literature on the effects of health on wages by providing empirical evidence from Australia. The model applied to estimate the effects takes advantage of a panel dataset to address the bias resulting potentially from all the sources of the endogeneity of health, unobserved heterogeneity and sample selection. The results indeed show that failing to address these issues would substantially bias the estimated effects of health on wages.

The purpose of this paper is to explore the determinants of self‐employment among rural to urban migrants in China.

The analysis is based on a sample of migrant household heads from the 2008 Rural‐Urban Migration in China and Indonesia (RUMiCI) survey. An estimate of the wage differential between self‐employed and employed workers is obtained by means of an endogenous switching model and used to estimate the employment choice. The procedure is extended to account for migration selectivity bias, for alternative statuses before migration, and for different post‐migration employment histories.

Self‐employed migrants are positively selected with respect to their unobserved characteristics; their wages are substantially higher than what they would have obtained had they chosen paid work. Furthermore, even after accounting for the substantial heterogeneity across cities, industries, occupations, and after correcting for the migration selectivity bias, the wage differential is found to be an important determinant of self‐employment.

The finding that market imperfections do not constrain the self‐employment choice of migrants does not imply that reforms designed to eliminate institutional barriers are undesirable. Policy should target the reduction of gaps between urban residents and migrants (such as the household registration system – hukou), so that migrants can access new business opportunities which are currently a prerogative of urban residents.

The paper analyses the determinants of self‐employment using a recent survey based on a sample of rural‐to‐urban migrants in China. The key findings indicate that migrants who choose self‐employment are positively selected in terms of their unobservable characteristics. Moreover, the wage differential has a strong positive effect on the probability of choosing self‐employment. In the transition to a market economy, which is taking place in China, the identification of the determinants of self‐employment is crucial.

The purpose of this paper is to investigate the relationship between job dissatisfaction and gender using an objective behavioural measure variable for dissatisfaction.

A monthly household panel structure was drawn from the Brazilian labour market, and a variety of econometric methodologies was applied.

This finding contradicts most articles published on the subject and corroborates the theoretical argument that women tend to be more risk-averse than men in the rates of labour turnover.

There are no sample surveys to address issue directly, thereby restricting the analyses to an individual study case. The concept of relative dissatisfaction is adopted, which can lead to either underestimation or overestimation, although this possibility has not been proven according to the sensitivity analysis applied.

The paper contributes to the literature by carrying out the first empirical analysis on the relationship between job satisfaction and gender using a categorial variable, which minimises the bias of subjectivity (psychological factors) since it is associated with employees’ attitude (what they do) rather than their opinion (what they say) about job dissatisfaction. The paper uses appropriate econometric methods to measure job dissatisfaction. The results differ from most published articles on the subject.

The purpose of this paper is to examine how the expansionary phase of a business cycle driven by an exogenous commodity price shock (oil) affects R&D expenditures among Ecuadorian firms.

Using two rounds of the Ecuadorian National Science, Technology and Innovation Activities Survey (ACTI 2012 and 2015) and a data set on gross value added (GVA) by industry, we run a sample correction model applied to a panel data of 1,023 firms from 2009 to 2014.

In deciding whether to invest in R&D, the higher an industry’s GVA, the lower the predicted probability that firms in that industry would invest. Additionally, R&D investments are not procyclical, and there is marginal evidence that they might actually be countercyclical. These findings are consistent with Schumpeter (1939) and Ouyang (2011) and are likely due to an increased opportunity cost of R&D investment during the oil boom.

In this study, we examine a boom period and not a full business cycle. This boom is driven by an exogenous shock, deviating from much of the current literature, which focuses on endogenously driven business cycles. This paper examines how the oil shock impacted a variety of industries, and not just attractive ones. Additionally, this paper adds to the limited literature around R&D and business cycles in Latin America.

El objetivo de este trabajo es examinar cómo la fase de expansión del ciclo económico, impulsada por un choque exógeno en los precios de un producto básico (petróleo), afecta al gasto en I + D de las empresas ecuatorianas.

Usando dos rondas de la Encuesta Nacional de Actividades de Ciencia, Tecnología e Innovación (ACTI 2012 and 2015) y una base de datos del valor añadido bruto (VAB) por industrias, se estima un modelo de corrección de muestra aplicado a un panel de 1,023 empresas de 2009 a 2014.

En cuanto a la decisión de invertir o no en I + D, mientras mayor es el VAB de una industria, menor es la probabilidad pronosticada de que las empresas inviertan en I + D. Adicionalmente, la inversión en I + D no es procíclica, y de hecho encontramos evidencia marginal de que muestra un comportamiento contracíclico. Estos resultados son consistentes con Schumpeter (1939) y Ouyang (2011) y se explican posiblemente por un incremento en el costo de oportunidad de invertir en I + D durante la bonanza petrolera.

En nuestro estudio examinamos un periodo de auge, y no un ciclo económico completo. Dicho auge fue ocasionado por un choque exógeno en los precios del petróleo, lo cual diferencia el análisis de gran parte de la literatura actual, enfocada en ciclos económicos endógenos. Este trabajo examina cómo la bonanza petrolera impactó a distintas industrias, y no únicamente a las extractivas. Nuestro estudio contribuye a la escasa literatura existente sobre la relación entre el gasto en I + D y los ciclos económicos en Latinoamérica.

O objetivo deste artigo é examinar como a fase de expansão de um ciclo de negócios impulsionada por um choque exógeno de preços de commodities (petróleo) afeta os gastos com P and D entre as empresas equatorianas.

Utilizando duas rodadas da Pesquisa Nacional Equatoriana de Atividades de Ciência, Tecnologia e Inovação (ACTI 2012 and 2015) e um conjunto de dados sobre o valor agregado bruto (VAB) por indústria, aplicamos um modelo de correção de amostra aplicado a um painel de 1.023 empresas de 2009 a 2014.

Ao decidir investir ou não em P and D, quanto maior o VAB de uma indústria, menor a probabilidade prevista que as empresas dessa indústria investiriam. Além disso, os investimentos em P and D não são pró-cíclicos, e há evidências marginais de que eles podem realmente ser contracíclicos. Essas descobertas são consistentes com Schumpeter (1939) e Ouyang (2011) e são provavelmente devidas a um maior custo de oportunidade de investimento em P and D durante o boom do petróleo.

Em nosso estudo, examinamos um período de expansão e não um ciclo completo de negócios. Esse boom é impulsionado por um choque de petróleo exógeno, diferenciando-se de grande parte da literatura atual, que se concentra em ciclos de negócios impulsionados endogenamente. O artigo examina como o choque do petróleo impactou diversas indústrias, e não apenas as extrativistas. Além disso, nosso trabalho contribui para a escassa literatura em torno de P and D e ciclos de negócios na América Latina.