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Estimation of an Occupational Choice Model when Occupations are Misclassified

Paul Sullivan

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines occupational choices using a discrete choice model that accounts for the fact that self-reported occupation data is measured with error. Despite evidence from validation studies which suggests that there is a substantial amount of measurement error in self-reported occupations, existing research has not corrected for classification error when estimating models of occupational choice. This paper develops a panel data model of occupational choices that corrects for misclassification in occupational choices and measurement error in occupation-specific work experience variables. The model is used to estimate the extent of measurement error in self-reported occupation data and quantify the bias that results from ignoring measurement error in occupation codes when studying the determinants of occupational choices and estimating the effects of occupation-specific human capital on wages. The parameter estimates reveal that 9% of occupational choices in the 1979 cohort of the National Longitudinal Survey of Youth are misclassified. Ignoring misclassification biases the median parameter in the occupational choice model by 25%.

Keywords: occupational choice; misclassification; simulation methods (search for similar items in EconPapers)
JEL-codes: C25 J24 C15 (search for similar items in EconPapers)
Date: 2006-11
New Economics Papers: this item is included in nep-dcm
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https://mpra.ub.uni-muenchen.de/862/1/MPRA_paper_862.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/9313/1/MPRA_paper_9313.pdf revised version (application/pdf)

Related works:
Journal Article: Estimation of an Occupational Choice Model when Occupations are Misclassified (2009) Downloads
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