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Pitfalls in Including Current Earnings in Labour Market Choice Estimating Equations

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  • Anh T. Le
  • Paul W. Miller

Abstract

This paper examines the conditions under which an empirical model of employment choice based on the differential in current earnings is an adequate specification when the theoretical model suggests the use of the difference in present values of the stream of lifetime earnings. The difference between the two approaches is shown to be variables for the growth rates of earnings in the employment states over which choice is being made.

Suggested Citation

  • Anh T. Le & Paul W. Miller, 1998. "Pitfalls in Including Current Earnings in Labour Market Choice Estimating Equations," Australian Economic Papers, Wiley Blackwell, vol. 37(4), pages 414-419, December.
    • Handle: RePEc:bla:ausecp:v:37:y:1998:i:4:p:414-419
    DOI: 10.1111/1467-8454.00031
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    Cited by:

    1. Kristy Eastough & Paul W. Miller, 2004. "The Gender Wage Gap in Paid‐ and Self‐Employment in Australia," Australian Economic Papers, Wiley Blackwell, vol. 43(3), pages 257-276, September.

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