Munich Personal RePEc Archive

An empirical derivation of the industry wage equation

Mason, Patrick L. (1994): An empirical derivation of the industry wage equation. Published in: Journal of Quantitative Economics , Vol. 10, No. 1 (1994): pp. 155-170.

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Abstract

This paper utilizes the Box-Cox transformation of variables technique to empirically derive an industry wage equation. Section I presents the determinants of potential wage differentials between and within industries. Section II estimates a Box-Cox industry wage equation. Likelihood ratio tests on alternative specifications of this equation affirm that competitive structure is a significant determinant of the industry wage rate and that human capital specifications of the industry wage equation (for the manufacturing sector) are not statistically valid. Section III summarizes the results.

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