Modeling Endogenous Mobility in Earnings Determination

ABSTRACT

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 exogenous mobility by modeling the matched data as an evolving bipartite graph using a Bayesian latent-type framework. Our results suggest that allowing endogenous mobility increases the variation in earnings explained by individual heterogeneity and reduces the proportion due to employer and match effects. To assess external validity, we match our estimates of the wage components to out-of-sample estimates of revenue per worker. The mobility-bias-corrected estimates attribute much more of the variation in revenue per worker to variation in match quality and worker quality than the uncorrected estimates. Supplementary materials for this article are available online.     

Relative Risk Regression for Binary Outcomes: Methods and Recommendations

Relative risks are often considered preferable to odds ratios for quantifying the association between a predictor and a binary outcome. Relative risk regression is an alternative to logistic regression where the parameters are relative risks rather than odds ratios. It uses a log link binomial generalised linear model, or log‐binomial model, which requires parameter constraints to prevent probabilities from exceeding 1. This leads to numerical problems with standard approaches for finding the maximum likelihood estimate (MLE), such as Fisher scoring, and has motivated various non‐MLE approaches. In this paper we discuss the roles of the MLE and its main competitors for relative risk regression. It is argued that reliable alternatives to Fisher scoring mean that numerical issues are no longer a motivation for non‐MLE methods. Nonetheless, non‐MLE methods may be worthwhile for other reasons and we evaluate this possibility for alternatives within a class of quasi‐likelihood methods. The MLE obtained using a reliable computational method is recommended, but this approach requires bootstrapping when estimates are on the parameter space boundary. If convenience is paramount, then quasi‐likelihood estimation can be a good alternative, although parameter constraints may be violated. Sensitivity to model misspecification and outliers is also discussed along with recommendations and priorities for future research.     

Young people and caregivers' perceptions of an intervention program for children who deliberately light fires

A significant number of children and adolescents engage in deliberate fire setting, beyond the scope of curiosity and experimentation. Interventions developed to respond to the needs of such fire setters generally involve educational and/or psychosocial approaches. Research evaluating the effectiveness of these interventions is dominated by outcome studies which rely on recidivism rates determined by either official records or parent reports. There has however, been no process evaluation studies published. This study presents a process analysis which aimed to identify the strengths and weaknesses of a Fire Awareness and Intervention Program in New Zealand, from the perspectives of program consumers. Qualitative research methods were employed, with data being derived from in-depth interviews with young people and their parents/caregivers. The analysis indicated that (a) the FAIP was generally regarded as a positive experience, (b) practitioners' qualities of empathy and understanding are important for developing rapport with the young people and their parents, (c) education-based intervention tailored to the young person's age and developmental level is important, (d) educational resources need to be updated and used flexibly to respond appropriately to the age and developmental level of the young person, and (e) inter-agency and intra-agency relationships need to be developed and maintained, with formal arrangements for reciprocal referral systems developed in order to respond to the needs of the clients. The resulting implications for service providers, along with future research are discussed.     

Leaving the parental home in Australia over the generations: Evidence from the Household,Income and Labour Dynamics in Australia (Hilda) Survey

The decision to remain in or leave the parental home represents the first housing career choice of young people. In this paper, we examine the parental home leaving outcomes for Australian birth cohorts in the twentieth century using recall questions contained in the Household, Income and Labour Dynamics in Australia Survey. The findings from survival analysis and hazard function modelling is that a continuous, gradual reduction in the age of first leaving the parental home in Australia is evident up to the 1947–51 birth cohort, followed by stability and then a rise in age of first leaving home for the most recent birth cohorts. Birth cohort effects remain significant even after other measured determinants of parental home leaving are taken into account. The paper confirms the strong roles that education, family background and ethnicity have on parental home leaving outcomes.     

Monitoring and evaluation in Malawi

When Ian Wilson and Carlos Barahona of the Statistical Services Centre at the University of Reading were asked to review an evaluation of the effectiveness of an aid package in Malawi, they expected a simple enough task. But few things in the developing world are simple. Where aid for the poorest is concerned, is evidence collected and analysed with enough rigour to enable well-informed decisions to be made?     

Changing partners: Northern NGOs,Northern governments

Northern NGOs live with an increasing level of insecurity and change. Governmental pressures to professionalise contribute to bureaucratisation, while inadequate overheads, an outdated project approach and lengthy approval procedures work against professionalism. Although they spend tens of millions of dollars annually through NGOs, few OECD governments have taken evaluation seriously. Northern NGO survival, theorefore, has been largely de-linked from performance. More fundamental is the growing identity crisis that Norther NGOs have in relation to their iincreasingly crisis that Northern NGOs have in relation to their increasingly effective Southern counterparts. Recession and faltering public support have pushed governments into reduced aid budgets and new concepts of accountability, participation and the role of ‘civil society’. Adding to the burden these shifts place on NGOs, many governments now deal directly with Southern NGOs. Many governments have also restricted their matching or ‘responsive’ NGO funding programmes, while providing massive funding increases — on highly favourable terms — for emergency and refugee work. Most OECD governments have also initiated special funds for AIDS, women, democracy and special geographical troublesports, channelling NGOs towards governmental priorities. Some basic principles are proposed for remedying the problems and for treating NGOs as important elements of civil society rather than as delivery mechanisms for governments. The author, who takes full responsibility for all errors, omissions and opinions, is very grateful to Elena Borghese, Tim Brodhead, Sharon Capeling-Alakija, Tim Draimin, Ian Filewod, Anna Foca, Henny Helmich and Terry Mooney for helpful comments on an early draft. An earlier version of the paper appeared in Smillie and Helmich (1993).     

The Political Attitudes of Australian Voters and Candidates

Modern theories of political representation assume that there will be little congruence between the views of political elites and the voters they govern. This paper uses survey data collected among candidates and voters at the 1987 Australian federal election to examine the extent of elite-mass differences on a range of 33 issues. The results show that Labor candidates and Labor voters are more likely to disagree on political issues, while Liberal-National candidates and voters are more likely to agree. Candidates of all parties are more liberal on issues such as Asian immigration, law enforcement and the protection of the environment, compared to their voters, while Senate candidates are more liberal than House of Representatives candidates. Finally, as other studies have found, candidates with constituency responsibilities, in this case those standing for the House of Representatives and incumbents, are more likely to be closer to the views of their party's voters than Senate and non-incumbent candidates.     

Managing the introduction of new technology

Most of the existing literature on the implications of new technology focuses on either its ‘impact’ or the social choices that lie behind strategies for its introduction into work organisations. The problems of managing the implementation of new technology have yet to be extensively examined despite this being one of the most critical aspects in the process of technological change. The findings from two case studies are presented which show how managers in the organisations concerned developed contrasting approaches to the problem of implementation in the context of opportunities and constraints presented by product markets and technological advance. Similarities between the two approaches are identified, in particular the role played by top management support in facilitating the acceptance of the new technology. The argument that management is able to develop a single unitary strategy towards the introduction of new technology is rejected in favour of a view of managerial actions as a series of flexible and changing sub-strategies associated with different stages in the process of change.     

When bubbles burst: Mimetic insights into minimising confidentiality breaches

This paper presents a theoretical model to help managers visualise and manage confidential situations more effectively. The model metaphorically likens a confidential setting to the properties of a soap bubble, e.g. elastic expansion or contraction, minimal surface area to contain a given volume, fragility, surface tension, pressure, stress, strain and the potential for bursting thereby releasing the contents to the external environment. We explore the conceptual developments in two phases. Firstly, looking at how a bubble and confidential scenario form and grow. Secondly, we consider how a bubble may burst and map these forces to ways in which confidentiality may be breached. Many attributes are mapped, the key ones being: the embedded value within the system, the criticality of maintaining confidentiality, increasing pressure, the corresponding stress/strain dynamics and the levels of trust between stakeholders. Key research propositions are derived from the model which aims to minimise the risk of a confidentiality breach.