Mean Earnings Research Articles

How much is a green card worth? Evidence from Mexican men who marry women born in the U.S.

Many countries impose restrictions on some immigrants' job mobility, likely reducing their wages. We quantify such effects for Mexican-born men in the U.S. by recognizing that immigrants who marry U.S. natives receive expedited “green cards” (Permanent Residency). Robust IV estimates indicate that intermarried Mexicans earn a 40 percent wage premium, and larger for the most mobile subgroups. Analogous premiums are statistically insignificant for men from Puerto Rico, who acquire no new rights because they are already U.S. citizens. Attributing the approximately 30 percent difference to green cards, we estimate that eliminating wait times would increase Mexicans' mean earnings $120,000–$150,000 in present value.

The political polarization of physicians in the United States: an analysis of campaign contributions to federal elections, 1991 through 2012.

Few current data are available regarding the political behavior of American physicians as the number of female physicians has increased and the number of solo practitioners has decreased. To analyze campaign contributions that physicians made from the 1991 to 1992 through the 2011 to 2012 election cycles to Republican and Democratic candidates in presidential and congressional races and to partisan organizations, including party committees and super political action committees (Super PACs). We explored partisan differences in physician contributions by sex, for-profit vs nonprofit practice setting, and specialty using multiple regression analysis. We studied the relation between the variation in the mean annual income across specialties and the mean percentage of physicians within each specialty contributing to Republicans. Differences in contributions to Republicans and Democrats, for all physicians and for subgroups. Between the 1991 to 1992 and the 2011 to 2012 election cycles, physician campaign contributions increased from $20 million to $189 million, and the percentage of active physicians contributing increased from 2.6% to 9.4%. Of physicians who contributed during the study period, the mean percentage contributing to Republicans was 57% for men and 31% for women. Since 1996, the percentage of physicians contributing to Republicans has decreased, to less than 50% in the 2007 to 2008 election cycle and again in the 2011 to 2012 election cycle. Contributions to Republicans in 2011 to 2012 were more prevalent among men vs women (52.3% vs 23.6%), physicians practicing in for-profit vs nonprofit organizations (53.2% vs 25.6%), and surgeons vs pediatricians (70.2% vs 22.1%). In 1991 to 1992, these contribution gaps were smaller: for sex, 54.5% vs 30.9%; for organizations, 54.2% vs 40.0%; and for specialty, 65.5% vs 32.7%. The percentage of physicians contributing to Republicans across specialties correlated 0.84 with the mean log earnings of each specialty; specialties with higher mean earnings had higher percentages of physicians contributing to Republicans. Between 1991 and 2012, the political alignment of US physicians shifted from predominantly Republican toward the Democrats. The variables driving this change, including the increasing percentage of female physicians and the decreasing percentage of physicians in solo and small practices, are likely to drive further changes.

Geographic Differences in the Earnings of Economics Majors

Economics has been shown to be a relatively high-earning college major, but geographic differences in earnings have been largely overlooked. The authors of this article use the American Community Survey to examine geographic differences in both absolute earnings and relative earnings for economics majors. They find that there are substantial geographic differences in both the absolute and relative earnings of economics majors, even when controlling for individual characteristics such as age, education, occupation, and industry. They argue that mean earnings in specific labor markets are a better measure of the benefits of majoring in economics than simply looking at national averages.

Is Self-Employment the Answer to Caste Discrimination? Decomposing the Earnings Gap in Indian Household Nonfarm Businesses

Using the India Human Development Survey data for 2004-05, we employ two methodologies to estimate the earnings structure of household nonfarm businesses owned by Scheduled Castes and Tribes (SCSTs) and non-SCSTs: OLS estimation of mean earnings, and quantile regressions. Correspondingly, we use two decomposition methods: the conventional Blinder-Oaxaca decomposition and Melly’s (2006) refinement of the Machado and Mata (2005) decomposition of quantile gaps. We find clear differences in characteristics between SCST-owned and non-SCST owned businesses. The Blinder-Oaxaca decomposition reveals that depending on the specification of explanatory variables, as much as 70 percent of the earnings gap could be attributed to the or the discriminatory component. Quantile regressions reveal that gaps are higher at lower deciles than the higher ones (both raw gaps, as well as after controlling for characteristics), and the decompositions show that the unexplained component is higher at the lower deciles than higher, suggesting that SCST-owned businesses at the lower end of the conditional distribution face greater discrimination, as compared to those at the higher end. Thus, we find strong evidence of a sticky floor, a phenomenon observed for gender wage gaps in developing countries (in contrast to a glass ceiling in developed countries).

Evaluation of racing performance after colic surgery in Thoroughbreds: 85 cases (1996–2010)

To determine racing performance after surgery for colic in Thoroughbreds. Retrospective cohort study. 85 racing Thoroughbreds that survived to discharge following colic surgery and 170 race-matched reference horses. Earnings, starts, and earnings per start were compared between horses that underwent surgery and reference horses, the proportions of horses that returned to racing were analyzed, and career longevity was determined. Among 85 racing Thoroughbreds that underwent colic surgery, 31 (36%) had primarily small intestinal lesions, of which 11 underwent resection; 54 (64%) had large intestinal lesions, of which 2 underwent resection. Fifty-nine of 85 (69%) horses that underwent colic surgery returned to racing after a 6-month recovery period versus 125 of 170 (73%) reference horses (OR, 0.81). In the 36-month postoperative period, reference horses earned a mean of $7,866 more, had a mean of 0.26 more starts, and had mean earnings per start of $29 more than horses that underwent surgery. Horses that underwent surgery did not have different career lengths than reference horses. Horses that underwent colic surgery did not have a significant reduction in measures of performance or career length, compared with a reference cohort.

Geographic Differences in the Earnings of Economics Majors

Economics has been shown to be a relatively high earning college major, but geographic differences in earnings have been largely overlooked. This paper uses the American Community Survey to examine geographic differences in both absolute earnings and relative earnings for economic majors. We find that there are substantial geographic differences in both the absolute and relative earnings of economics majors even controlling for individual characteristics such as age and advanced degrees. We argue that mean earnings in specific labor markets are a better measure of the benefits of majoring in economics than simply looking at national averages.

A Graduate Real Estate Program Survey: Careers and Compensation

This paper addresses the impact of the recent recession upon job placement and compensation levels for recent graduates of graduate real estate programs. Based on a survey of graduates from nine graduate real estate programs, ‘‘recession-era’’ graduates (2008–2010) and ‘‘pre-recession’’ graduates (2000–2007) were compared to gain insight into how the types of jobs, salaries, bonuses, and other benefits were affected by the recession. The survey also identified the types of companies and the real estate sectors that were hiring. The results indicate that recession era graduates had a longer job search, accepted positions in a wider range of real estate professions, and experienced a relatively large drop in their starting compensation as compared to prerecession graduates. The mean earnings decreased from approximately $73,000 (pre-recession) to $59,000 (recession-era).

Fairness or anger in ultimatum game rejections?

Guth, Schmittberger and Schwarze’s (1982) ultimatum game result is replicated with mean earnings of £59.98 (N = 51) S.D. = £11.45, from a possible £80, and a linear relationship between offer size and acceptance rate. Results indicate a significant interaction effect between offer size and response, F(3, 31) = 3.69, p < 0.05 on response time. Our novel adjustment introduced the proposer’s most ‘common offer’ to responders. Results were in accord with prior work (Knez & Camerer, 1995); social comparisons between the participant, and a hypothesised responder – the receiver of the ‘common offer’ – were made only at mid-range offers (£2), for which low common offers were accepted more from proposers making low common offers than high t(45) = 3.28, p< 0.05.

Earnings Announcements, Aggregate Earnings, and Individual-Firm Stock Returns: A Signal Extraction Perspective

There is an extensive stream of research that documents a positive association between earnings surprises and stock returns at the individual firm level. We posit that individual firms’ earnings surprises have systematic and firm-specific components that differ in their persistence, implying that the market reaction to individual firms’ earnings surprises should depend upon the relative magnitudes of the underlying systematic and firm-specific earnings surprise components. We further posit that investors behave as if they solve a signal extraction problem that allows them to estimate from aggregate (e.g., market) earnings the systematic earnings surprise component. Our signal extraction framework implies that the market reaction to individual firms’ earnings surprises is increasing in the cross-sectional mean earnings surprise and that the magnitude of the mean effect is inversely related to the cross-sectional dispersion of the earnings surprises. Our results are consistent with these predictions. Also consistent with signal extraction, we find that the effect of the crosssectional mean earnings surprise is significantly larger for firms that announce their earnings early in the quarter. We also find that signal extraction occurs for firms with a large percentage of individual investors, but not a large percentage of institutional investors, consistent with institutional investors having private information that allows them to partition a firm’s earnings surprise into its systematic and firm-specific components. Overall, our results suggest that to understand the market reaction to individual firms’ earnings announcements, one must consider aggregate earnings.

Comparative Advantage and Risk Premia in Labor Markets

Using the Survey of Income and Program Participation (SIPP) we estimate quarterly labor earnings risk across 21 industries of the US economy. We document a significant and positive association between earnings risk (both permanent and transitory) and average log-earnings across industries. The Finance sector is 50% riskier than Government which implies a mean earnings premium of 20%. We develop an equilibrium framework to analyze the interplay between volatility in labor earnings and comparative advantage in determining the level of earnings across industries. We use the model to decompose how much of the empirical correlation represents compensation for risk and how much represents selection. The positive association between permanent risk and earnings is compensation for risk, but selection is responsible for the observed relationship between temporary risk and mean earnings.

Long Term Influences of Age-Education Transition on the Brazilian Labour Market.

The objective of this study is to estimate the long term mean earnings of the male Brazilian population, taking into account the ageing process of the population and the increase in educational attainment. Using census data, household sample surveys, as well as population and education projections, estimates indicate that an ageing population and an increase in education will have a 2 percent impact on the annual growth of an average income in Brazil by 2050. The challenge for the future is to improve the proportion of the Brazilian population with completed college degrees.

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.

The longer-term effects of human capital enrichment programs on poverty and inequality: Oportunidades in Mexico

Previous empirical research has shown that Mexico's Oportunidades program has succeeded in increasing schooling and improving health of disadvantaged children. This paper studies the program's potential longer-term consequences for the poverty and inequality of these children. It adapts methods developed in DiNardo, Fortin and Lemieux (1996) and incorporates existing experimental estimates of the program's effects on human capital to analyze how Oportunidades will affect future earnings of program participants. We nonparametrically simulate earnings distributions, with and without the program, and predict that Oportunidades will increase future mean earnings but have only modest effects on poverty rates and earnings inequality.

More Evidence of Bias in the Differential Timeliness Measure of Conditional Conservatism

ABSTRACT Despite the conceptual appeal and popularity of the differential timeliness (DT) measure of conditional conservatism proposed in Basu (1997), Dietrich et al. (2007) and Givoly et al. (2007) have identified considerable biases associated with that measure. We renew their call to avoid using the DT measure because it is affected unexpectedly by two empirical regularities—namely, scale is negatively related to (1) deflated mean earnings and (2) variance of stock returns. Even though these regularities are unrelated to conditional conservatism, their joint effect is substantial and pervasive. More importantly, prior findings regarding time-series and cross-sectional variation in differential timeliness are confounded by corresponding variation in these regularities. Data Availability: Data are publicly available from sources identified in the article.

How Common is "Parking" Among Social Security Disability Insurance (SSDI) Beneficiaries? Evidence from the 1999 Change in the Level of Substantial Gainful Activity (SGA)

Fewer Social Security Disability Insurance (DI) beneficiaries have their earnings suspended or terminated because of work than those who are actually working, partly because beneficiaries earnings at a level below substantial gainful activity (SGA) to retain benefits. We assess the extent of parking by examining how beneficiary earnings and months off the rolls for work responded to a 1999 change in the SGA level for non-blind beneficiaries from $500 to $700 per month. Specifically, our difference-in-difference analysis compares longitudinal data for two beneficiary cohorts with different incentives to park their earnings; one experienced the increased SGA level the first year after its Trial Work Period (TWP), when beneficiaries can earn any amount without losing benefits, while the two-year-earlier cohort did not. The impact of the increased SGA level is consistent with parking, but its magnitude small. The reduction in TWP completers with earnings less than $500 was 1.0 percentage points, the reduction in the percentage with earnings over $700 was 1.2 percentage points, and the increase for those with earnings between $500 and $700 was 2.2 percentage points. However, there was no change in mean earnings; small increases for those with relatively low earnings were offset by reductions for those with relatively high earnings. The SGA increase had a significant negative effect on the average number of months that beneficiaries were off the rolls for work; the effect was largest-about six-tenths of a month-for those who earned $500 to $700 during in year they completed their TWP.

Lag screw fixation of dorsal cortical stress fractures of the third metacarpal bone in 116 racehorses

The effectiveness and best method to manage dorsal cortical stress fractures is not clear. This study was performed to evaluate the success of lag screw fixation of such fractures in a population of Thoroughbred racehorses. Lag screw fixation of dorsal cortical stress fractures is an effective surgical procedure allowing racehorses to return to their preoperative level of performance. The records of 116 racehorses (103 Thoroughbreds) admitted to Equine Medical Centre, California between 1986 and 2008 were assessed. Information obtained from medical records included subject details, limb(s) affected, fracture configuration, length of screw used in repair and presence of concurrent surgical procedures performed. Racing performance was evaluated relative to these factors using Fisher's exact test and nonparametric methods with a level of significance of P<0.05. Of 92 Thoroughbred horses, 83% raced preoperatively and 83% raced post operatively, with 63% having ≥5 starts. There was no statistically significant association between age, gender, limb affected, fracture configuration or presence of concurrent surgery and likelihood of racing post operatively or of having 5 or more starts. The mean earnings per start and the performance index for the 3 races following surgery were lower compared to the 3 races prior to surgery; however, 29 and 45% of horses either improved or did not change their earnings per start and performance index, respectively. Data show that lag screw fixation is successful at restoring ability to race in horses suffering from dorsal cortical stress fractures.

A Winner′s Mean Earnings in Lottery and Inverse Moments of the Binomial Distribution

We study the mean earnings of a lottery winner as a function of the number n of participants in the lottery and of the success probability p. We show, in particular, that, for fixed p, there exists an optimal value of n where the mean earnings are maximized. We also establish a relation with the inverse moments of a binomial distribution and suggest new formulas (exact and approximate) for them.

How Much Do Respondents in the Health and Retirement Study Know About Their Tax-Deferred Contribution Plans? A Cross-Cohort Comparison

We use information from Social Security earnings records to examine the accuracy of survey responses regarding participation in tax-deferred pension plans. As employer-provided defined benefit pensions are replaced by voluntary contribution plans, employees’ understanding of the link between their annual contribution decisions and their post-retirement wealth is becoming increasingly important. We examine the extent to which wage-earners in the Health and Retirement Study correctly report their inclusion in tax-deferred contribution plans and, conditional on inclusion, their annual contributions. We use two samples representing different cohorts in two different periods: the original HRS cohort interviewed in 1992 at ages 51-61, and a combination of the War Babies and Early Baby Boomer cohorts at the same ages interviewed twelve years later. Our findings indicate that while respondents interviewed in 2004 were more likely to report correctly whether they were included in DC plans, they were no more accurate in reporting whether they contributed to their plans than respondents interviewed in 1992. Respondents in both cohorts, moreover, overestimated their annual contributions. In both 1992 and in 2004, the mean absolute difference between respondent-reported and Social Security earnings record contributions was 1.5 times larger than the mean earnings record contribution.

Changes in the Distribution of Long-Run Earnings and Retirement Incomes - Have Recent Cohorts Fallen Behind?

This study is motivated by the well-documented increase in wage inequality during the 1980s and the continued high levels of inequality during the 1990s. Specifically, we examine changes in the distribution of long-run earnings and changes in economic mobility for recent cohorts. These cohorts, who either entered retirement in the 1990s or are nearing retirement, experienced very different labor market conditions during their working lives than did earlier cohorts. Economic growth led to higher mean earnings for recent cohorts but the distribution of yearly earnings became less equal. As a result of these changes, the average worker nearing retirement had higher long-run earnings than members of previous cohorts. This, however, need not have translated into higher long-run earnings across the board. Those at the bottom of the distribution of long-run earnings might actually have had lower accumulated earnings than previous cohorts if the gains from growth were more than offset by the increase in inequality of earnings during the 1980s. If the accumulated earnings of those at the bottom of the distribution fell, then this could have had an impact both on decisions about whether to continue to work after the period of normal retirement and on Social Security benefits. The second, and related, policy question is whether mobility has increased. If mobility has increased, then this may partially offset the impact of the increase in earnings inequality. Outcomes may be less equal, but there is less chance of being stuck with a bad outcome. Our ability to measure earnings mobility for five cohorts spanning a twenty-five-year period allows us to address this important question.

Work and earnings of low-skilled women: Do employee and employer reports provide consistent information?

The employment and earnings effects of the state-oriented federal welfare reform legislation of 1996 have been extensively studied using either survey or administrative data. Because information may differ substantially across these sources, it is difficult both to identify the true effects of these interventions and to compare evaluation estimates of these interventions that rely on these different data sources. This paper uses data gathered as part of the Wisconsin Child Support Demonstration Evaluation to examine the extent to which administrative (unemployment insurance) and survey records on employment and earnings for a sample of low-skilled women are congruent. Our findings suggest that there are substantial differences in both mean earnings and mean employment rates between survey and unemployment insurance (UI) data. We identify the extent to which these disparities can be explained by differences between these data sources in the definition of earnings or the method of data collection. We also examine the differences between UI and survey sources in estimates of employment and earnings growth among low-skilled women.