June 1, 1998
In this thesis, estimates of employer tenure, union status and gender wage effects in Britain in the 1990s are presented. The robustness of these estimates are assessed in relation to modelling issues surrounding estimation using the British Household Panel Survey, waves 1-6. In chapter three, the employer tenure wage effect is explored by investigating the extent to which OLS estimates are biased by correlation between employer tenure length and unobserved job match and individual heterogeneity. The impact of variations in the quality of employer tenure data and enforcing consistency upon the tenure data over time are also addressed. Results show OLS estimates of returns to tenure to be upwardly biased and that inconsistencies in the tenure data produce a downward bias on panel estimates. In chapter four, comparisons of cross-section and panel estimates of the union wage effect are presented. The robustness of the fixed-effects estimates are then explored, most importantly in relation to measurement error in the union status variable. Although evidence is found to support the hypothesis that cross-section estimates of the union wage effect are biased upwards, measurement error in the union status variable is found to exert a downward bias in the fixed-effects estimates, thus overstating the divergence. In chapter five, the impact on the estimated wage equation of decomposing potential labour market experience into actual experience and different activities while out of the labour market is assessed. The impact of controls for labour market motivation, aspirations and constraints on the female wage are also explored. The effect of the various wage equation specifications is then gauged in relation to the estimated gender wage differential. The main finding is that the unexplained or discriminatory portion of the gender wage differential is seriously overstated when inadequate female labour market experience measures are included in the wage equation.
not held in Res Lib - bibliographic reference only