Gerald Makepeace

Interpreting sample selection effects

Abstract This note examines the structure of a two-sector selection model with a probit selector equation. The sector selected depends on each observations characteristics, indexed by θi, i − 1,…, N. Each sector has a distinct regression equation and the expected values of the dependent variable for these equations vary with the sector selected and, through the sample selection terms, θi. The sample selection effect is interpreted by examining the differences in the expected values of the dependent variables in the sector equations as the sector selected and θi change. The standard case where there is only one sector is studied as a special case.

Female labour force participation and the choice of occupation: The supply of teachers

Abstract This paper examines the relationship between occupational choice and participation decisions by women. It is motivated by recent policy debate in the U.K. concerning the supply of teachers where about sixty per cent of teachers are female and the recruitment of women is vital to the maintenance of the labour force in teaching. Models of earnings determination, occupational choice and labour force participation are estimated for a large sample of female graduates. The choice of occupation and labour market status is modelled as a joint decision between: (i) teaching and non-teaching; and (ii) working and not-working. Estimates from alternative models show that participation decisions are correlated with occupational choice, with individuals who choose teaching being more likely to work. The choice of occupation is also affected by the earnings differential between teaching and non teaching suggesting that teacher shortages could be alleviated by raising teachers earnings.

The statistical measurement of discrimination

Abstract This note argues that measures of discrimination should compare the whole distribution of the logarithm of earnings when there is discrimination with the whole distribution when there is no discrimination. It derives a form for the density of the distribution when there is no discrimination and discusses how this might be estimated.

The estimation of a disequilibrium real wage equation for Britain

Abstract An aggregate wage equation is formulated based on a disequilibrium labor market model. The specification allows for an important special case to be tested, namely the equilibrium hypothesis that real wages move instantaneously to equate the demand for and supply of labor. The hypothesis that the British labor market has been in equilibrium is rejected. The adjustment path for real wages is monotonic and dominated by demand factors. Real wages move quickly to eliminate excess demand but the results contradict the monetarist contention that the aggregate labor market is continuously in a temporary, if not full, equilibrium.