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State dependence, serial correlation and heterogeneity in the union membership dynamics

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  • Sheng-Kai Chang

Abstract

In order to distinguish the true and spurious state dependence from the complicated dynamics of union membership, the simulation estimators incorporating the lagged dependent variables, unobserved individual heterogeneity and correlations among the errors are implemented in this article to study union membership dynamics. It is found that the true state dependence of union membership under multivariate t assumption is much higher than the standard dynamic panel probit estimators which are under multivariate normal assumptions. On the other hand, the spurious state dependence (the variance of the unobserved individual heterogeneity) is estimated to be higher when using the standard dynamic panel probit estimators than under multivariate t assumption. Moreover, blacks and married men are found to have higher union membership true state dependence than whites and unmarried men.

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  • Sheng-Kai Chang, 2012. "State dependence, serial correlation and heterogeneity in the union membership dynamics," Applied Economics, Taylor & Francis Journals, vol. 44(26), pages 3453-3460, September.
    • Handle: RePEc:taf:applec:44:y:2012:i:26:p:3453-3460
    DOI: 10.1080/00036846.2011.577018
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    References listed on IDEAS

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    Cited by:

    1. Sheng-Kai Chang, 2014. "Simulation Estimation of Dynamic Panel Discrete Choice Models Using the $$t$$ t Distributions," Computational Economics, Springer;Society for Computational Economics, vol. 43(4), pages 395-409, April.

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