Robust Estimation of Wage Dispersion with Censored Data: An Application to Occupational Earnings Risk and Risk Attitudes

Daniel Pollmann, Thomas Dohmen and Franz Palm
Additional contact information
Daniel Pollmann: QuantCo, Inc.
Franz Palm: Maastricht University

De Economist, 2020, vol. 168, issue 4, No 3, 519-540

Abstract: Abstract We present a semiparametric method to estimate group-level dispersion, which is particularly effective in the presence of censored data. We apply this procedure to obtain measures of occupation-specific wage dispersion using top-coded administrative wage data from the German IAB Employment Sample. We then relate these robust measures of earnings risk to the risk attitudes of individuals working in these occupations. We find that willingness to take risk is positively correlated with the wage dispersion of an individual’s occupation.

Keywords: Dispersion estimation; Earnings risk; Censoring; Quantile regression; Occupational choice; Sorting; Risk preferences; SOEP; IABS (search for similar items in EconPapers)
JEL-codes: C14 C21 C24 D01 D81 J24 J31 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Working Paper: Robust Estimation of Wage Dispersion with Censored Data: An Application to Occupational Earnings Risk and Risk Attitudes (2013)
Working Paper: Robust Estimation of Wage Dispersion with Censored Data: An Application to Occupational Earnings Risk and Risk Attitudes (2012)
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DOI: 10.1007/s10645-020-09374-x

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