D4 Published development or research report or study
Using Twins to Resolve the Twin Problem of Having a Bad Job and a Low Wage
Authors: Böckerman Petri, Ilmakunnas Pekka, Vainiomäki Jari
Publisher: IZA
Publication year: 2014
Web address : http://ftp.iza.org/dp8557.pdf
Abstract
We use data on twins matched to register-based information on earnings to examine the
long-standing puzzle of non-existent compensating wage differentials. The use of twin data
allows us to remove otherwise unobserved productivity differences that were the prominent
reason for estimation bias in the earlier studies. Using twin differences we find evidence for
positive compensation of adverse working conditions in the labor market.
We use data on twins matched to register-based information on earnings to examine the
long-standing puzzle of non-existent compensating wage differentials. The use of twin data
allows us to remove otherwise unobserved productivity differences that were the prominent
reason for estimation bias in the earlier studies. Using twin differences we find evidence for
positive compensation of adverse working conditions in the labor market.
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