Volume 29, Number 2 (Spring) 1994
Neumark, David and Sanders Korenman. 1994. "Sources of Bias in Women's Wage Equations: Results Using Sibling Data." Journal of Human Resources 29(2):379-405.
We use data on sisters to jointly address heterogeneity bias and endogeneity bias in estimates of wage equations for women. This analysis yields evidence of biases in OLS estimates of wage equations for white and black women, some of which are detected only when the two sources of bias are addressed simultaneously. For both white and black women there is evidence of upward bias in the estimated returns to schooling. Bias-corrected estimates of the effect of marriage on wages, for white women, suggest a positive marriage premium. We also use the sibling data to identify our models, and test a number of other commonly-used identifying assumptions as overidentifying restrictions.
David Neumark is an assistant professor of economics at the University of Pennsylvania. Sanders Korenman is an associate professor in the Humphrey Institute at the University of Minnesota. Both are affiliated with the National Bureau of Economic Research. This paper was prepared for presentation at the December 1991 Donner Foundation Conference on the Economic Well-Being of Women, held at the University of Minnesota Industrial Relations Center. The authors thank McKinley Blackburn, William Even, Michael Keane, Alice Nakamura, Mark Rosenzweig, Kenneth I. Wolpin, and an anonymous referee for helpful comments. Elaina Rose provided research assistance. The data and programs used for this research can be obtained from August 1994 to August 1997 from David Neumark at Michigan State University, East Lansing, MI 48824.
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