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Using Twins to Resolve the Twin Problem of Having a Bad Job and a Low Wage

Petri Böckerman (), Pekka Ilmakunnas () and Jari Vainiomäki

No 8557, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We use data on twins matched to register-based information on earnings to examine the long-standing puzzle of non-existent compensating wage differentials. The use of twin data allows us to remove otherwise unobserved productivity differences that were the prominent reason for estimation bias in the earlier studies. Using twin differences we find evidence for positive compensation of adverse working conditions in the labor market.

Keywords: compensating differentials; earnings; unobserved ability; productivity (search for similar items in EconPapers)
JEL-codes: J28 J31 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2014-10
New Economics Papers: this item is included in nep-eff, nep-lab and nep-lma
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Published in: The Manchester School, 2018, 86 (2), 155-177

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Related works:
Journal Article: Using Twins to Resolve the Twin Problem of Having a Bad Job and a Low Wage (2018) Downloads
Working Paper: Using twins to resolve the twin problem of having a bad job and a low wage (2015) Downloads
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