ABSTRACT
This chapter describes the conceptual model for estimating the hypotheses. K. J. McLaughlin estimated an individual's expected wage with a wage equation, based upon the individual's characteristics, then included the estimate as an instrument in an equation with lags of the same characteristics. Holding constant the unemployment rate, other unmeasurable regional or areal level effects may differ between foreign-born men and native-born workers. Marital status is important for determining attachment to the labor force and stability of employment. A weight variable is provided in the Current Population Survey samples to normalize each individual household's effect on the sample to represent its expected proportion in the population as a whole. The areas used are SMSAs, on the assumption that SMSAs would be the closest approximation to "labor markets" which people would consider in assessing unemployment rates.
