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We analyze the impact of misperceptions of the unemployment rate on individual wages, using the European Social Survey.
We also re-estimated our model of the impact of misperceptions on wages using this alternative index.
We contribute to the empirical literature on the impact of misperceptions, by showing that they affect an individual's actual labor market outcomes.
Therefore, our identification of the impact of misperceptions on wages comes from the variation within country on misperceptions of the labor market situation.
Similar(56)
The optimal subsidy on preventive expenditures is shown to depend on the combined impacts of misperception, externalities and self-selection.
This finding provides a potential mechanism for the impact of information misperceptions on the wage level.
By controlling for the regional unemployment rate, we aim, on the one hand, at estimating the impact of information misperceptions on wages netting out the impact of the regional unemployment rate, thus correcting potential biases due to its omission.
Altogether, in this exploratory analysis, we find support for the relevance of introducing controls for workers' ability and for the regional unemployment rate in the regression that aims at estimating the impact of unemployment misperceptions on wages.
Column 2 allows for the impact of unemployment misperceptions on wages to be different depending on whether the individual is pessimistic or optimistic about the current labor market situation.
The interesting addition to the literature on misperceptions concerns our estimation of the impact of unemployment misperception on wages (line 1 in either Tables 2 or 3).
Specifically, we evaluate the impact of the misperception of labor market tightness unemployment rate on individual wages.
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Since I tried Ludwig back in 2017, I have been constantly using it in both editing and translation. Ever since, I suggest it to my translators at ProSciEditing.

Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com