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Sampling errors and the substitution between white-collar and blue-collar workers

W. H. J. Hassink, R. D. Huigen and Kees Zeelenberg

Applied Economics Letters, 1994, vol. 1, issue 10, 164-166

Abstract: The consequences of sampling errors in estimating a simple labour demand model, using panel data of firms is discussed. It is found that the sampling errors of the variables at the firm-level due to the sampling process at the employee-level, have a substantial influence on the estimates of the elasticity of substitution between white-collar and blue-collar workers. It is shown that because of the large noise-to-signal ratio of the explanatory variable no evidence of substitution can be found.

Date: 1994
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DOI: 10.1080/135048594357925

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