Estimating Compensating Wage Differentials with Endogenous Job Mobility

We demonstrate a strategy for using matched employer-employee data to correct endogenous job mobility bias when estimating compensating wage differentials. Applied to fatality rates in the census of formal-sector jobs in Brazil between 2003-2010, we show why common approaches to eliminating ability bias can greatly amplify endogenous job mobility bias. By extending the search-theoretic hedonic wage framework, we establish conditions necessary to interpret our estimates as preferences. We present empirical analyses supporting the predictions of the model and identifying conditions, demonstrating that the standard models are misspecified, and that our proposed model eliminates latent ability and endogenous mobility biase

Revisiting the Economics of Privacy: Population Statistics and Confidentiality Protection as Public Goods

This paper has been replaced with http://digitalcommons.ilr.cornell.edu/ldi/37. We consider the problem of the public release of statistical information about a population–explicitly accounting for the public-good properties of both data accuracy and privacy loss. We first consider the implications of adding the public-good component to recently published models of private data publication under differential privacy guarantees using a Vickery-Clark-Groves mechanism and a Lindahl mechanism. We show that data quality will be inefficiently under-supplied. Next, we develop a standard social planner’s problem using the technology set implied by (ε, δ)-differential privacy with (α, β)-accuracy for the Private Multiplicative Weights query release mechanism to study the properties of optimal provision of data accuracy and privacy loss when both are public goods. Using the production possibilities frontier implied by this technology, explicitly parameterized interdependent preferences, and the social welfare function, we display properties of the solution to the social planner’s problem. Our results directly quantify the optimal choice of data accuracy and privacy loss as functions of the technology and preference parameters. Some of these properties can be quantified using population statistics on marginal preferences and correlations between income, data accuracy preferences, and privacy loss preferences that are available from survey data. Our results show that government data custodians should publish more accurate statistics with weaker privacy guarantees than would occur with purely private data publishing. Our statistical results using the General Social Survey and the Cornell National Social Survey indicate that the welfare losses from under-providing data accuracy while over-providing privacy protection can be substantial

An Economic Analysis of Privacy Protection and Statistical Accuracy as Social Choices

Statistical agencies face a dual mandate to publish accurate statistics while protecting respondent privacy. Increasing privacy protection requires decreased accuracy. Recognizing this as a resource allocation problem, we propose an economic solution: operate where the marginal cost of increasing privacy equals the marginal benefit. Our model of production, from computer science, assumes data are published using an efficient differentially private algorithm. Optimal choice weighs the demand for accurate statistics against the demand for privacy. Examples from U.S. statistical programs show how our framework can guide decision-making. Further progress requires a better understanding of willingness-to-pay for privacy and statistical accuracy

Economic Analysis and Statistical Disclosure Limitation

This paper explores the consequences for economic research of methods used by data publishers to protect the privacy of their respondents. We review the concept of statistical disclosure limitation for an audience of economists who may be unfamiliar with these methods. We characterize what it means for statistical disclosure limitation to be ignorable. When it is not ignorable, we consider the effects of statistical disclosure limitation for a variety of research designs common in applied economic research. Because statistical agencies do not always report the methods they use to protect confidentiality, we also characterize settings in which statistical disclosure limitation methods are discoverable; that is, they can be learned from the released data. We conclude with advice for researchers, journal editors, and statistical agencies

Proceedings from the Synthetic LBD International Seminar

On May 9, 2017, we hosted a seminar to discuss the conditions necessary to im- plement the SynLBD approach with interested parties, with the goal of providing a straightforward toolkit to implement the same procedure on other data. The proceed- ings summarize the discussions during the workshop

Modeling Endogenous Mobility in Wage Determination

We evaluate the bias from endogenous job mobility in fixed-effects estimates of worker- and firm-specific earnings heterogeneity using longitudinally linked employer-employee data from the LEHD infrastructure file system of the U.S. Census Bureau. First, we propose two new residual diagnostic tests of the assumption that mobility is exogenous to unmodeled determinants of earnings. Both tests reject exogenous mobility. We relax the exogenous mobility assumptions by modeling the evolution of the matched data as an evolving bipartite graph using a Bayesian latent class framework. Our results suggest that endogenous mobility biases estimated firm effects toward zero. To assess validity, we match our estimates of the wage components to out-of-sample estimates of revenue per worker. The corrected estimates attribute much more of the variation in revenue per worker to variation in match quality and worker quality than the uncorrected estimates

Public Accounting Firm Characteristics: Their Importance To Students And Discussion By Recruiters

This was a survey-based study of the importance that students attach to various employer qualities and the extent that public accounting recruiters discuss such qualities. Attitudinal differences among students with different academic credentials and differences in the structure of recruiting interviews by various sized public accounting firms were the focus of the study. The data were collected from 106 accounting students and 63 recruiters. Before the beginning of the fall campus interviewing period, students rated the importance of 36 employer characteristics and recruiters reported to what extent they discussed the characteristics during the recruiting process. In general, no differences were noted among students of varying academic credentials. Significant differences, however, were noted in the level of discussion by recruiters from firms of varying size. The extent that recruiters from the various sized firms discussed the characteristics was compared with the student perceived importance. The extent that the national firm recruiters discussed the characteristics most closely matched the student importance ratings, and the discussion by the local firm recruiters least matched the student ratings

Modeling Endogenous Mobility in Earnings Determination

We evaluate the bias from endogenous job mobility in fixed-effects estimates of worker- and firm-specific earnings heterogeneity using longitudinally linked employer-employee data from the LEHD infrastructure file system of the U.S. Census Bureau. First, we propose two new residual diagnostic tests of the assumption that mobility is exogenous to unmodeled determinants of earnings. Both tests reject exogenous mobility. We relax the exogenous mobility assumptions by modeling the evolution of the matched data as an evolving bipartite graph using a Bayesian latent class framework. Our results suggest that endogenous mobility biases estimated firm effects toward zero. To assess validity, we match our estimates of the wage components to out-of-sample estimates of revenue per worker. The corrected estimates attribute much more of the variation in revenue per worker to variation in match quality and worker quality than the uncorrected estimates

International Union Activity: Politics of Scale in the Australian Labour Movement

In recent years, industrial relations scholars have begun to discuss the 'revitalisation strategies' unions are using to rebuild lost density, power, and political leverage. This thesis studies the role international activities play in the revitalisation of Australian unions. Rather than assert the importance of international activity, or emphasise the value of certain forms of international activity, the thesis seeks to understand why unions choose to engage in particular forms of international activity. International activity in Australian unions takes on a remarkable diversity of forms. The analysis of international activity therefore requires a theory that is capable of describing these different forms of international activity and then explaining why they exist. However most scholars have not examined the role of union agency in choosing international activity. Within industrial relations, there is very little existing theory or research on which to base the kind of analysis proposed for the thesis. Most theories are ideologically driven, prescriptive accounts that either promote or challenge particular institutions or ideas about international activity. The problem is that they deal with international activity as an abstract kind of response to universal pressures of globalisation. These kinds of arguments serve well to articulate the need for unions to 'think globally', but are ill suited to the task of the thesis, which is to explain particular forms of international activity in particular unions. The questions about international activity that the thesis intends to answer form a point of connection between industrial relations and the related discipline of labour geography. In making the connections between labour geography theory and the analysis of union international strategy, the thesis argues for labour geography as a political economic foundation for industrial relations in the tradition of Hyman's Marxist theory of industrial relations. This provides a critical theoretical perspective and conceptual vocabulary with which to criticise and extend industrial relations research on international activity. The result is a spatialised theory organised according to topics of interest in industrial relations research that can be applied to the study of Australian international activity. The thesis is evenly divided between developing this theory and research on international activity in the Australian union movement. Empirical analysis begins with a study of the international activities and policy of the ACTU, distinguishing different kinds of international activity. By treating the international activities of the ACTU as representative of the Australian union movement as a whole, the thesis identifies three functional levels of international activity: strategy-sharing, regional solidarity, and global regulation. The chapter also examines the material and discursive construction of the international scale within the ACTU. The thesis also analyses the international activities of three Australian unions,the TWU, LHMU and CFMEU. While all three unions engage in each level of international activity, the review of their activities shows differences in the focus of each union. The thesis suggests that the explanation for these different ratios depends in part on the spatial structure of the industries that the different unions organise. The kind of research undertaken in this thesis has little precedent. The work of the labour geographers on international activity does not deal with union revitalisation strategy, and the research from industrial relations on the strategic aspects of international activity have not latched on to labour geography. This thesis argues that unions scale their activities internationally for particular reasons, some of which are structural and can be specified up front, and others that are historically contingent and can only be explored on a case-by-case basis. In examining this 'politics of scale' the thesis redefines many of the issues in the discussion of international activity and proposes a new conceptual background for industrial relations generally

Why the Economics Profession Must Actively Participate in the Privacy Protection Debate

When Google or the U.S. Census Bureau publish detailed statistics on browsing habits or neighborhood characteristics, some privacy is lost for everybody while supplying public information. To date, economists have not focused on the privacy loss inherent in data publication. In their stead, these issues have been advanced almost exclusively by computer scientists who are primarily interested in technical problems associated with protecting privacy. Economists should join the discussion, first, to determine where to balance privacy protection against data quality; a social choice problem. Furthermore, economists must ensure new privacy models preserve the validity of public data for economic research