Wage and Job Risk in Taiwan: A Panel Data Analysis

• Main Authors: Lan, Chien-Hao, 蘭建豪
• Other Authors: Shaw, Dai-Gee
• Format: Others
• Language: zh-TW
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/544622

碩士 === 國立政治大學 === 經濟學系 === 106 === In general, the risk elasticity coefficient of wage and the value of a statistical life (VSL) are estimated by the hedonic wage model in order to evaluate the benefit of reducing mortality risk for governments and scholars. However, the term of VSL can easily be misinterpreted literally, thus this thesis instead utilized the approach proposed by Cameron (2010) to calculate the willingness to pay for a micro-risk reduction (). Past studies on compensating wage differentials usually use cross-sectional data, assume that there is no endogeneity problem, and directly conduct analysis with ordinary least squares regression. However, Garen (1988) considers that risk is an endogenous variable and adopts a two-stage least squares approach to deal with the endogeneity problem of risk. The data of labor and risk characteristics used in this thesis are from the Panel Study of Family Dynamics during 1999 to 2014 published by the Research Center for Humanities and Social Sciences in Academia Sinica and from the Bureau of Labor Insurance, Ministry of Labor respectively. The total employees are divided into two categories: technical workers and managers/professionals. In order to tackle the partial endogeneity problem, the panel data and fixed effects model are utilized to conduct a regression analysis. We found that the risk elasticity coefficients of total employees, technical workers, and managers/professionals are 0.0338, 0.0567, and 0.0220 respectively. The first two regressions are statistically significant, indicating that the higher the risk, the higher the wage if other things being equal, hence the results confirm the existence of compensating wage differentials. Nevertheless, managers/professionals face less risk at work so they won’t ask for any risk premium. Their employers also won’t add risk to the characteristics of the job; therefore, there is no compensating wage differentials for managers and professionals. In addition to employer’s and employee’s characteristics, environmental variables are also important factors of the wage equation, and the result shows that employers have to pay higher wages to attract people to work in areas with less comfortable temperatures and dirtier air quality because employees prefer more comfortable temperatures and cleaner air. This finding is consistent with Roback’s (1982) theory and empirical results.