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.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Box-Cox; functional form; wage equation; labor market inequality; efficiency wage
• Subjects: J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure ; Wage Differentials; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C52 - Model Evaluation, Validation, and Selection; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L20 - General

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