Paul E. Gabriel

Favorable Self-Selection and the Internal Migration of Young White Males in the United States

This study offers an alternative empirical technique to test whether the favorable self-selection hypothesis applies to internal migrants in the United States. Our empirical specification attempts to determine if prospective migrants possess unobserved traits such as higher ability or motivation which influence their earnings potential relative to nonmigrants. Using NLSY data for 1985 through 1991, we find some support for the favorable self-selection hypothesis for white males who move from one SMSA to another. Prior to their move, prospective migrants enjoy a consistent advantage in annual wage and salary income relative to nonmigrants with similar earnings-related characteristics.

An Examination of Market Efficiency in British Racetrack Betting

The nature of the British racetrack betting market provides a distinctly different opportunity for testing market efficiency. On the basis of data from a single racing season, we compare the returns to two similar forms of betting: (1) starting price bets placed with bookmarkers and (2) pari-mutuel tote bets. Our analysis indicates that tote returns are consistently higher than starting price returns, even though both betting forms are of similar risk and the payoffs are widely reported. The persistently higher tote returns suggest that the British racetrack betting market does not satisfy the conditions of semistrong efficiency. Our results also provide indirect support that the market fails to meet the conditions for strong efficiency.

An Examination of Customer Racial Discrimination in the Market for Baseball Memorabilia

This article investigates customer racial discrimination in the market for baseball memorabilia. The authors examine whether a players ethnic background influences the price collectors are willing to pay for recently issued rookie baseball cards. Their empirical analysis of all rookie cards issued from 1984 through 1990 examines if price is explained not only by past player performance but also by other factors such as expected future performance and ethnicity. The authors raise the possibility that bias could occur because race influences expectations of future performance. However, in contrast to previous studies, their empirical results indicate that price differences are not influenced by race. Copyright 1995 by University of Chicago Press.

Risk aversion and the earnings of US immigrants and natives

The literature on the earnings of natives and immigrants has heretofore ignored differences in compensating wages for job risks. It is possible that the risk involved in migration may indicate a greater willingness on the part of immigrants to accept riskier jobs than natives. Alternatively, immigrants may attempt to protect their migration investment by choosing occupations with less risk, indicating a higher degree of risk aversion. This paper examines differences in risk aversion between US immigrants and natives, and corresponding differentials in wage premiums for job risk. Our analysis suggests that on average immigrants are exposed to 21% less risk than natives, but receive a 25% higher risk premium. The higher degree of risk aversion of immigrants and their lower exposure to risk, and thus lower earnings, explains 5% of the higher observed earnings of natives. We also find that earlier immigrant cohorts (pre-1970) are employed in riskier jobs than are recent cohorts, but the difference accounts fo...

An Examination of Efficiency in British Racetrack Betting: Errata and Corrections

AbstractShortly after the publication of our paper in this Journal (Gabriel and Marsden 1990), we received a kind letter with several informational questions from Paddy Waldron, a graduate student at Wharton and long-time “punter” (bettor) in his native Ireland. One of Waldrons questions caused us to recheck the original source (The Sporting Chronicle Handicap Book, 1978) from which our data were gathered by research assistants. As his questions suggested to us, we discovered that a footnote had been overlooked and that the tote returns on Irish races included in the flat season (about 27 percent of all such races) are quoted as returns on a 20-pence bet (their minimum bet) rather than as returns on the 10-pence minimum used for reporting the other flat races. Thus we found that we had overstated the tote returns. We completely recollected all our data, making the necessary adjustments for Irish races and adding in eight races that had been reported out of sequence in the Handicap Book…

Positive assortative mating and spouses as complementary factors of production: a theory of labour augmentation

This article develops a model of intellectual labour augmentation to explain both the marriage wage premium and educational assortative mating. We suggest that husbands and wives are complementary factors of production where a spouses education and skills augment their partners productivity and earnings potential. We test this proposition using data from the 2000 US Census of Population and the 2003 Current Population Survey. Our results indicate that for working couples the marriage premium for husbands and wives is directly related to the education level of their spouses–suggesting that positive assortative mating may be attributable to the labour market effects of intellectual augmentation of married households.

An empirical examination of racial and gender differences in wage distributions

Abstract This research presents an examination of racial and gender differences in earnings distributions among a sample of young workers. Using data from the 1987 National Longitudinal Survey of Youth, we utilize an ordered-response logit model to estimate the probability of a white male being in a given position in the earnings distribution, based on his human capital and other personal characteristics. We then generate “predicted” probabilities of given earnings positions for individual black males, black females, and white females. Non-parametric tests indicate that significant differences exist between the actual and predicted earnings distributions for all of the racial and gender groups studied. We interpret this as evidence of the impact of differential treatment in the labor market.

A note on occupational variations in the returns to education in the US labor market

Purpose – Seeks to answer the question: “do certain occupations offer lower financial benefits to acquiring years of formal schooling than others?”.Design/methodology/approach – This study uses data from the 2003 Current Population Survey to estimate rates of return to education across occupational categories in the US labor market. The wage model employed is based on the human capital model of income determination.Findings – The analysis suggests that additional schooling has a positive impact on the weekly earnings of men and women in both white‐ and blue‐collar occupations – with the highest returns accruing to sales, managerial, and professional workers. Although returns are generally higher for white‐collar workers, no link is found between the returns to schooling and the propensity of occupations to be comprised of “primary” or “secondary” sector jobs.Originality/value – Supports the notion that additional schooling increases the earnings of men and women in both blue‐ and white‐collar occupations.

Difference in earnings structures across local labor markets

Abstract This paper investigates whether workers encountered different earnings structures across local labor markets in the United States. Our analysis of human capital earnings models suggests that the U.S. is comprised of numerous distinct local labor markets — as defined by a Standard Metropolitan Statistical Area.

The impact of gender differences in occupational attainment on the relative earnings of young workers

This study investigates the potential influence that gender differences in occupational structures have upon the relative earnings of young women in the US labour market. The empirical methodology integrates a multinomial logit model of occupational attainment with estimated human capital wage equations across occupations. Empirical analysis of data from the 1979 cohort of the NLSY suggests that nearly two-thirds of the gender gap in hourly earnings results from men having more favourable earnings structures within occupations, relative to their female colleagues. Gender differences in occupational distributions apparently have a minor impact on the relative earnings of women.