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Estimation of an Occupational Choice Model when Occupations are Misclassified

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  • Paul Sullivan

Abstract

This paper develops an empirical occupational choice model that corrects for misclassification in occupational choices and measurement error in occupation-specific work experience. The model is used to estimate the extent of measurement error in occupation data and quantify the bias that results from ignoring measurement error in occupation codes when studying the determinants of occupational choices and estimating the effects of occupation-specific human capital on wages. The parameter estimates reveal that 9 percent of occupational choices in the 1979 cohort of the NLSY are misclassified. Ignoring misclassification leads to biases that affect the conclusions drawn from empirical occupational choice models.

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  • Paul Sullivan, 2009. "Estimation of an Occupational Choice Model when Occupations are Misclassified," Journal of Human Resources, University of Wisconsin Press, vol. 44(2).
    • Handle: RePEc:uwp:jhriss:v:44:y:2009:i2:p495-535
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    Cited by:

    1. Yamaguchi, Shintaro, 2010. "The effect of match quality and specific experience on career decisions and wage growth," Labour Economics, Elsevier, vol. 17(2), pages 407-423, April.
    2. Carlos Carrillo‐Tudela & Ludo Visschers, 2023. "Unemployment and Endogenous Reallocation Over the Business Cycle," Econometrica, Econometric Society, vol. 91(3), pages 1119-1153, May.
    3. Francis Green & Golo Henseke, 2016. "The changing graduate labour market: analysis using a new indicator of graduate jobs," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-25, December.
    4. Sullivan, Paul, 2010. "Empirical evidence on occupation and industry specific human capital," Labour Economics, Elsevier, vol. 17(3), pages 567-580, June.
    5. Shintaro Yamaguchi, 2009. "Formation of Heterogeneous Skills and Wage Growth," Global COE Hi-Stat Discussion Paper Series gd09-088, Institute of Economic Research, Hitotsubashi University.
    6. Matthew D. Baird, 2017. "Labor Supply Estimation Biases From Disregarding Nonwage Benefits," Economic Inquiry, Western Economic Association International, vol. 55(2), pages 1064-1090, April.
    7. Rajesh Paleti & Lacramioara Balan, 2019. "Misclassification in travel surveys and implications to choice modeling: application to household auto ownership decisions," Transportation, Springer, vol. 46(4), pages 1467-1485, August.
    8. Sebastián Aparicio & Andrés Ramírez Hassan & Diego Fernando Gómez Sánchez, 2013. "Elección de ocupaciones que generen empleo usando modelos de elección discreta: Medellín Área Metropolitana 2009," Estudios Gerenciales, Universidad Icesi, December.
    9. Shintaro Yamaguchi, 2012. "Tasks and Heterogeneous Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 30(1), pages 1-53.
    10. Maria Felice Arezzo & Giuseppina Guagnano, 2019. "Misclassification in Binary Choice Models with Sample Selection," Econometrics, MDPI, vol. 7(3), pages 1-19, July.
    11. By Barbara Mueller & Jürg Schweri, 2015. "How specific is apprenticeship training? Evidence from inter-firm and occupational mobility after graduation," Oxford Economic Papers, Oxford University Press, vol. 67(4), pages 1057-1077.
    12. Ben Yahmed, Sarra, 2016. "Formal but less equal: Gender wage gaps in formal and informal jobs in Brazil," ZEW Discussion Papers 16-085, ZEW - Leibniz Centre for European Economic Research.
    13. Arndt Werner & Johanna Gast & Sascha Kraus, 2014. "The effect of working time preferences and fair wage perceptions on entrepreneurial intentions among employees," Small Business Economics, Springer, vol. 43(1), pages 137-160, June.

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    More about this item

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General

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