Differences In Unobservable Characteristics Research Articles

Relative income concerns and smoking behaviour: The role of unobserved heterogeneity.

Status or relative concerns (as in the idiom 'keeping up with the Joneses') can lead to negative feelings such as stress and anxiety. One key question is whether these concerns relate to daily smoking behaviour. The conjecture is that status concerns and the accompanying stress and anxiety might be associated with a higher likelihood of smoking and a higher number of cigarettes smoked, generating a higher instant physical reward and reducing the stress and anxiety. The literature aiming to identify this relationship focuses mostly on a single cross section of individuals, ignoring potential differences in unobserved characteristics of smokers and non-smokers (e.g., genetic factors, personality differences, parental smoking during childhood). This paper investigates the role of unobserved individual characteristics on this relationship, which has not been done in previous studies. Using a long panel data of smoking information in Germany and a variety of panel data model specifications, we show that there is no statistically significant association between relative income concerns and the likelihood of smoking or the number of cigarettes smoked among the overall population. We find a positive and significant relationship only among people who smoked at least one cigarette in the past. A 10% appreciation in the income of comparable other individuals relates to about 3.5 more cigarettes per month among these people. Importantly, failing to allow for the unobserved influences of smoking leads to three times larger estimates than when using models with unobserved factors correlating to the income and smoking behaviour. The results are robust with respect to alternative assumptions and specifications where we use different functional forms of unobserved heterogeneity, definitions of relative concerns, incomes, and reference groups.

The Evolution of the Returns to Schooling for Refugees and Other Immigrants in the United States

Previous research has shown that refugees have lower earnings than other immigrants with comparable human capital. The differences in the degree of correlation between schooling and unobservable factors across the two groups may contribute to this gap. This paper investigates the returns to schooling for refugee and non-refugee men in the United States. The results show that the returns to schooling are lower for refugees upon arrival. This gap persists over two decades in the country and is robust to specifications that conduct sensitivity analysis, suggesting that differences in unobservable characteristics that are important in immigrants’ labor market success, particularly adaptability traits, drive the initial gap in the returns to schooling and how the gap changes over time.

Board gender diversity and ESG disclosure: evidence from the USA

PurposeThe purpose of this paper is to investigate the relationship between corporate debt-like compensation and the value of excess cash holdings.Design/methodology/approachThe environmental, social and governance (ESG) disclosure score provided by Bloomberg is used as a proxy for the extent of corporate social responsibility (CSR). The empirical analysis is based on a sample of 379 firms that made up the Standard & Poor’s 500 Index over the period 2010-2015. In order to take into account the endogeneity problem between board gender diversity and ESG disclosure, a fixed effect model with lagged board variables is used.FindingsTwo main results arise from this study. First, no significant relationship is found between board gender diversity and ESG disclosure. Second, the evidence also partially confirms critical mass theory, as below three female directors the relationship between board gender diversity and ESG disclosure is not statistically significant. However, beyond that, no significant relationship was found.Research limitations/implicationsReasonable theoretical arguments drawn from stakeholder theory suggest that board gender diversity may have a positive effect on ESG disclosure. The empirical evidence presented neither supports, nor denies stakeholder theory. However, the results may be improved by enlarging the frontiers of this research in time and space, increasing the perimeter of qualitative data integrated in this investigation.Practical implicationsThis paper offers theoretical and empirical arguments for the feminization of corporate boards, not only in the name of equality between women and men and organizational justice, but also in the light of organizational performance (examined through the prism of governance). Transparency, analyzed using the proxy of ESG disclosure, is strongly and positively correlated with a feminization of boards, if the proportion of women is significant and sufficient to be able to prevent and surpass the “invisibilization” phenomenon, which is based on the marginalization of passive ultra-minorities, reduction to silence, marginalization (disqualification of women voice or exit strategy), assimilation or the endorsement of stigma.Originality/valueFirst, this makes a theoretical contribution to the diversity and governance literature by examining the effect of WOCB on ESG disclosure through the stakeholder theory (Freeman, 2010). Second, the authors contribute to the CSR literature (cf. Byron and Post, 2016) by documenting specifically the effect of board gender diversity on CSR disclosures through ESG. Indeed, ESG research mainly concentrates on firm financial performance (Galbreath, 2013). No study has examined the relationship between WOCB and ESG disclosure. Finally, from an empirical standpoint, an FE model with lagged board variables (Liu et al., 2014) is used to fully address the endogeneity problems in the relationship between WOCB and ESG disclosure that may occur because of differences in unobservable characteristics across firms or reverse causality (Boulouta, 2013).

What Drives the Gender Gap? An Analysis Using Sexual Orientation

SummaryGender differences in productivity, if any, that are unobserved to researchers may produce an omitted variable bias in gender gap studies. Finding a subpopulation with less acute differences in unobserved characteristics would allow this concern to be addressed. This paper shows that gays and lesbians are one such interesting group—for the intra‐household division of labor and its effects on market productivity cannot be sex‐determined in this subpopulation. Indeed, there are substantial intra‐household variations in labor market outcomes and other characteristics; the patterns and magnitudes are similar to different‐sex households. Simultaneously, the gender wage gap between gays and lesbians is much smaller than in the heterosexual population; in specifications that control for geographic location it is near zero. These findings suggest that the intra‐household division of labor is an important factor driving gender differences in labor market outcomes. Such an interpretation is consistent with recent studies that control for productivity.

The effect of carsharing on vehicle holdings and travel behavior: A propensity score and causal mediation analysis of the San Francisco Bay Area

We examine the impacts of carsharing on travel behavior utilizing a San Francisco Area subsample of the 2010–2012 California Household Travel Survey. We control for self-selection bias due to differences in observed characteristics of the respondents using propensity-score based matching. We find that vehicle holdings of carsharing members are substantially and significantly lower than for non-members with similar characteristics in terms of individual and household demographics and built environment features of both residential and job location. These differences increase as the propensity to enroll in carsharing programs increases. A latent construct, which measures the propensity to own or utility from owning vehicles and rises with numbers of vehicles owned, is lower for members by 0.3–1.3 standard deviations relative to non-members. Members are also likely to walk, bike, and use transit more frequently than non-members. However, these differences are relatively minor and tend to be statistically non-significant. Future research should control for self-selection bias arising from differences in unobserved characteristics of respondents, as well as simultaneity bias whereby decisions concerning vehicle ownership both influence and are influenced by the decision to join carsharing programs.

Self-employment and job satisfaction: an empirical analysis

Purpose – The purpose of this paper is to test whether the usual positive effect of self-employment on job satisfaction remains once the greater autonomy and flexibility afforded by self-employment have been factored in, as well as the existence of differences in unobserved characteristics across individuals. Design/methodology/approach – It may be thought that the probability of being self-employed and the declared job satisfaction are not independent from each other due to differences in unobserved characteristics – as psychological or personality traits – across individuals. Therefore, self-employment should be treated as an endogenous variable when it is introduced as an explanatory variable in a job satisfaction equation. Given this, the paper proposes the estimation of a treatment effect model in which self-employment and job satisfaction equations are estimated jointly. Findings – The results suggest that the usual positive effect of self-employment on job satisfaction is due to the greater work autonomy afforded by self-employment, and not to the greater willingness of the self-employed to report higher levels of satisfaction. Thus, the paper finds that once flexibility and autonomy are considered, the usual positive effect of self-employment on job satisfaction disappears and becomes negative. Research limitations/implications – It would be useful further empirical analysis using other data, especially panel data, to test the robustness of the results. Originality/value – The paper proposes an alternative way to analyse the relation between self-employment and job satisfaction by taking into account both the greater autonomy and flexibility afforded by self-employment, as well as psychological or personality traits.

What Drives the Gender Gap? An Analysis Using Sexual Orientation

Gender differences in productivity, if any, that are unobserved to researchers may produce an omitted variable bias in gender gap studies. Finding a subpopulation with less acute differences in unobserved characteristics would allow this concern to be addressed. This paper argues that gays and lesbians are one such interesting group—for the intra-household division of labor and its effects on market productivity cannot be sex-determined in this subpopulation. Indeed, there are substantial intra-household variations in labor market outcomes and other characteristics; the patterns and magnitudes are similar to different-sex households. Simultaneously, the gender wage gap between gays and lesbians is much smaller than in the heterosexual population; in specifications that control for geographic location it is near zero. These findings suggest that the intra-household division of labor is an important factor driving gender differences in labor market outcomes. Such an interpretation is consistent with recent studies that control for productivity.

Employment effects of extended geographic scope in job search

This paper uses a unique possibility to link unemployed individuals' stated willingness to move for work with administrative data, giving us the possibility to analyse the effects of individual willingness-to-move on labour market outcome. Those with extended geographic job search area have a higher probability of finding a job. However, the greatest effect is found on the local labour market, indicating that it is not the extended geographic scope per se that increases the likelihood of escaping unemployment, but differences in unobservable characteristics between those who use an extended search area and those who do not.

WHAT FACTORS INFLUENCE THE EARNINGS OF GENERAL PRACTITIONERS AND MEDICAL SPECIALISTS? EVIDENCE FROM THE MEDICINE IN AUSTRALIA: BALANCING EMPLOYMENT AND LIFE SURVEY

To date, there has been little data or empirical research on the determinants of doctors' earnings despite earnings having an important role in influencing the cost of health care, decisions on workforce participation and labour supply. This paper examines the determinants of annual earnings of general practitioners (GPs) and specialists using the first wave of the Medicine in Australia: Balancing Employment and Life, a new longitudinal survey of doctors. For both GPs and specialists, earnings are higher for men, for those who are self-employed and for those who do after-hours or on-call work. GPs have higher earnings if they work in larger practices, in outer regional or rural areas, and in areas with lower GP density, whereas specialists earn more if they have more working experience, spend more time in clinical work and have less complex patients. Decomposition analysis shows that the mean earnings of GPs are lower than that of specialists because GPs work fewer hours, are more likely to be female, are less likely to undertake after-hours or on-call work, and have lower returns to experience. Roughly 50% of the income gap between GPs and specialists is explained by differences in unobserved characteristics and returns to those characteristics.

Gender Gap Among Gays and Lesbians

Gender differences in productivity, if any, that are unobserved to researchers may produce an omitted variable bias in gender gap studies. Finding a subpopulation with less acute differences in unobserved characteristics would allow this concern to be addressed. This paper argues that gays and lesbians are one such interesting group --- for the intra-household division of labor and its effects on market productivity cannot be sex-determined in this subpopulation. Indeed, there are substantial intra-household variations in labor market outcomes and other characteristics; the patterns and magnitudes are similar to different-sex households. Simultaneously, the gender wage gap between gays and lesbians is much smaller than in the heterosexual population; in specifications that control for geographic location it is near zero. These findings suggest that the intra-household division of labor is an important factor driving gender differences in labor market outcomes. Such an interpretation is consistent with recent studies that control for productivity.

Employment Creation in North Carolina, 1990-2006: An Exploration using North Carolina National Establishment Time Series (NETS)

North Carolina’s economy has been particularly dynamic over the last several decades. The state produces a growing proportion of the nation’s output in goods and services. Population and employment have been expanding at above average rates. At the same time, the state has been the site of substantial economic dislocation and a restructuring away from the manufacturing which had been a source of employment growth just a few years ago towards services, health care and business services, in particular. The sectoral shift has been paired with a geographic shift, further towards the already dominant Central Piedmont. This report is an initial attempt to examine that process of economic growth and restructuring using an “economic microscope” that can measure the components of employment change – openings, closures, expansions, contractions, and relocations – and link them to individual establishments so that the incidence of each can be linked to characteristics such as detailed sector, ownership characteristics, size, age, and location. Individual establishments can also be traced over time allowing differences in unobserved characteristics, such as growth propensity, to be measured. The data used are an extract of the National Establishment times Series (NETS) database. These have been compiled from Dun and Bradstreet records, linked longitudinally and to their headquarters (if any), and supplemented with geo-codes, imputations, and data quality indicators. This report is descriptive. Subsequent reports will focus on specific analytic issues.

How Damaging is Part-Time Employment to a Woman's Occupational Prospects?

This paper investigates the causes of the well documented association between part-time employment and low occupational attainment amongst British women. In particular, the relative importance of structural factors and unobserved heterogeneity to the occupational attainment of women who choose to work part-time is investigated. The results indicate that there are significant structural impediments to women in part-time employment obtaining their true occupational potential. However, structural factors explain only part of the relatively low occupational attainment of women in part-time employment: differences in unobserved characteristics between part-time and full-time workers also contribute to the low occupational attainment of women in part-time employment.

Dietary effects of the National School Lunch Program and the School Breakfast Program

In this paper we use 24-h dietary recall data to assess the dietary effects of participation in the National School Lunch Program (NSLP) and the School Breakfast Program (SBP). After adjustment for differences in characteristics between NSLP participants and nonparticipants, NSLP participation is associated with higher lunch intakes of vitamin A, calcium, and magnesium, and a lower intake of vitamin C. Although mean intakes of other key dietary components such as food energy, iron, cholesterol, and sodium are higher for NSLP participants than for nonparticipants, these differences appear to be due to underlying differences in unobserved characteristics (eg, food preferences, appetites, or food energy needs) rather than to the NSLP. Both at lunch and over 24 h, NSLP participation is associated with consumption of a higher percentage of food energy from fat and saturated fat. SBP participation is associated with higher breakfast intakes of food energy, calcium, riboflavin, phosphorus, and magnesium, and with a higher percentage of breakfast food energy from fat and saturated fat, and a lower percentage of food energy from carbohydrate.

Using simultaneous latent structure models to analyze group differences: Exploratory analysis of buying style items

This article shows how methods for simultaneous latent structure analysis can be used to test for intergroup differences in unobservable characteristics. In many respects these techniques are similar to those for simultaneous factor analysis. To show how these methods can be used, we analyze data obtained from the 1979 Study of Media and Markets collected by the Simmons Market Research Bureau. Five dichotomized items pertaining to buying style attitudes were chosen as “indicators” of a latent variable (or variables): brand loyalty, willingness to experiment, degree of conformity to buying style of others, persuadibility, and style consciousness. The sample was composed of full-time employed, married, white females in the middle social class categories recognized on the survey. Two groups were compared in terms of latent structure model parameters. The first group consisted of those who work “at a career” and the second consisted of those whose work was “just a job.” Using the methods advocated here there is no significant difference between these two groups once the “brand loyalty” item is excluded. The model-search procedure takes account of within-group contributions to lack of fit. Generalizations of this procedure may be useful in exploratory analysis using the simultaneous latent structure model.