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Original Articles

Sampling errors and the substitution between white-collar and blue-collar workers

Pages 164-166 | Published online: 05 Oct 2010
 

Abstract

The consequences of sampling errors in estimating a simple labour demand model, using panel data of firms is discussed. It is found that the sampling errors of the variables at the firm-level due to the sampling process at the employee-level, have a substantial influence on the estimates of the elasticity of substitution between white-collar and blue-collar workers. It is shown that because of the large noise-to-signal ratio of the explanatory variable no evidence of substitution can be found.

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