Volume 21, Number 4 (Fall) 1986
Heckman, James J., and V. Joseph Hotz. 1986. "An Investigation of the Labor Market Earnings of Panamanian Males: Evaluating the Sources of Inequality." Journal of Human Resources 21(4):507-542.
This paper presents empirical evidence on the determinants of labor market earnings and inequality for males in Panama. Using newly available microdata, we estimate earnings equations based on the measurement framework of Mincer (1974) and compare them with those for other countries at various stages of economic development. We present evidence on two aspects of inequality in less developed economies: labor market segmentation and social stratification. We present tests of the segmentation hypothesis, including several of the dual labor market hypotheses and discuss their inherent ambiguity. We also present evidence on the importance of family background for earnings determination and educational attainment.
The authors are the Henry Schultz professor and visiting assistant professor of economics, respectively, at the University of Chicago and research associates in the Program in Quantitative Economic Analysis at NORC. They wish to thank Bo Honore for suggestions and research assistance as well as Ricardo Barros, Gary Becker, Angus Deaton, Bill Dickens, Jacob Mincer, George Psacharopoulos, Mark Rosenzweig, Paul Schultz, and three anonymous referees for their comments on an earlier draft. The data used in this paper were collected under the auspices of a United Nations project headed by Gian Sahota of Vanderbilt University. The authors wish to thank Professor Sahota for his cooperation in obtaining access to the data and interpreting the meaning of certain variables to us. For further information regarding these data, contact Professor Gian Sahota, Department of Economics, Vanderbilt University, Nashville, Tennessee 37235.
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