TY  - JOUR
AU  - Gibbons,Robert
AU  - Katz,Lawrence F.
AU  - Lemieux,Thomas
AU  - Parent,Daniel
TI  - Comparative Advantage, Learning, and Sectoral Wage Determination
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8889
PY  - 2002
Y2  - April 2002
UR  - http://www.nber.org/papers/w8889
L1  - http://www.nber.org/papers/w8889.pdf
N1  - Author contact info:
Robert S. Gibbons
MIT Sloan School of Management
100 Main Street, E62-524
Cambridge, MA  02142
Tel: 617/253-0283
Fax: 617/253-2660
E-Mail: rgibbons@mit.edu

Lawrence F. Katz
Department of Economics
Harvard University
Cambridge, MA  02138
Tel: 617/495-5148
Fax: 617/613-1245
E-Mail: lkatz@harvard.edu

Thomas Lemieux
Department of Economics
University of British Columbia
#997-1873 East Mall
Vancouver, BC V6T 1Z1
CANADA
Tel: 604/822-2092
Fax: 604/822-5915
E-Mail: thomas.lemieux@ubc.ca

Daniel Parent
Institute of Applied Economics
HEC Montreal
3000 Chemin de la Cote-Sainte-Catherine
Montreal, QC, Canada H3T 2A7
Tel: 514-340-7002
Fax: 514-340-6411
E-Mail: daniel.parent@mcgill.ca
AB  - We develop a model in which a worker's skills determine the worker's current wage and sector.  Both the market and the worker are initially uncertain about some of the worker's skills. Endogenous wage changes and sector mobility occur as labor-market participants learn about these unobserved skills.  We show how the model can be estimated using non-linear instrumental-variables techniques.  We then apply our methodology to study the wages and allocation of workers across occupations and across industries.  For both occupations and industries, we find that high-wage sectors employ high-skill workers and offer high returns to workers' skills.  Estimates of these sectoral wage differences that do not account for sector-specific returns are therefore misleading.  We also suggest further applications of our theory and methodology.
ER  -