GEE Estimation of a Two-Equation Panel Data Model: An Analysis of Wage Dynamics and the Incidence of Profit-Sharing in West Germany
We propose a generalized estimating equations approach to the analysis of the mean and the covariance structure of a bivariate time series process of panel data with mixed continuous and discrete dependent variables. The approach is used to jointly analyze wage dynamics and the incidence of profit-sharing in West Germany. Our findings reveal a significantly positive conditional correlation of wages and the incidence of profit-sharing. Furthermore, they indicate that permanent unobserved individual ability is comparatively more important in the profit-sharing than in the wage equation and show that shocks have a long-lasting effect on transitory wages but not on the incidence of profit-sharing. Hence, the results support theoretical predictions that selection into profit-sharing is mostly due to unobservable ability and that profit-sharing ties wages more closely to productivity.
Year of publication: |
2007
|
---|---|
Authors: | Pannenberg, Markus ; Spiess, Martin |
Publisher: |
Berlin : Deutsches Institut für Wirtschaftsforschung (DIW) |
Subject: | Zeitreihenanalyse | Panel | Varianzanalyse | Reallohn | Erfolgsbeteiligung | Schätzung | Deutschland | generalized estimating equations | covariance structure | longitudinal data | real wages | variable pay |
Saved in:
Open Access
Series: | DIW Discussion Papers ; 663 |
---|---|
Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Working Paper |
Language: | English |
Other identifiers: | 523980418 [GVK] hdl:10419/18395 [Handle] RePEc:diw:diwwpp:dp663 [RePEc] |
Classification: | J33 - Compensation Packages; Payment Methods ; J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc ; C35 - Discrete Regression and Qualitative Choice Models ; C33 - Models with Panel Data ; D31 - Personal Income, Wealth and Their Distributions |
Source: |
Persistent link: https://www.econbiz.de/10010260895