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Exploring skill distribution tails through stochastic dominance
Journal article   Peer reviewed

Exploring skill distribution tails through stochastic dominance

Petra Besenhard
Journal of applied econometrics (Chichester, England), Vol.39(4), pp.714-720
06-2024

Abstract

Business & Economics Mathematical Methods In Social Sciences Social Sciences, Mathematical Methods Economics Social Sciences
Location choices of differently skilled workers are analyzed in previous work on labor mobility, which proposes a model that suggests thicker tails in the skill distributions of large cities. This paper replicates the empirical findings of this work by using quantile regression and density plots as employed in the existing study, while also suggesting an alternative testing method for thick tails in the form of an initial stochastic dominance test. The test reveals clear evidence of a thicker lower tail, but the results are less clear for the upper tail, which raises some questions on how to best handle extreme upper tails of skill distributions.
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