Search Results

Author: Urzua, Sergio
Resulting in 8 citations.
1. Heckman, James J.
Humphries, John Eric
Urzua, Sergio
Veramendi, Gregory
The Effects of Educational Choices on Labor Market, Health, and Social Outcomes
Working Paper No. 2011-002, Human Capital and Ecnomic Opportunity Working Group, Economic Research Center, University of Chicago, October 2011
Cohort(s): NLSY79
Publisher: University of Chicago
Keyword(s): Adolescent Behavior; Armed Services Vocational Aptitude Battery (ASVAB); Behavior, Antisocial; Body Mass Index (BMI); CESD (Depression Scale); Cognitive Ability; Divorce; Educational Aspirations/Expectations; Educational Attainment; Health, Mental; Health/Health Status/SF-12 Scale; Labor Market Outcomes; Pearlin Mastery Scale; Rosenberg Self-Esteem Scale (RSES) (see Self-Esteem); School Performance; Welfare

Permission to reprint the abstract has not been received from the publisher.

Using a sequential model of educational choices, we investigate the effect of educational choices on labor market, health, and social outcomes. Unobserved endowments drive the correlations in unobservables across choice and outcome equations. We proxy these endowments with numerous measurements and account for measurement error in the proxies. For each schooling level, we estimate outcomes for labor market, health, and social outcome. This allows us to generate counter-factual outcomes for dynamic choices and a variety of policy and treatment effects. In our framework, responses to treatment vary among observationally identical persons and agents may select into the treatment on the basis of their responses. We find important effects of early cognitive and socio-emotional abilities on schooling choices, labor market outcomes, adult health, and social outcomes. Education at most levels causally produces gains on labor market, health, and social outcomes. We estimate the distribution of responses to education and find substantial heterogeneity on which agents act.
Bibliography Citation
Heckman, James J., John Eric Humphries, Sergio Urzua and Gregory Veramendi. "The Effects of Educational Choices on Labor Market, Health, and Social Outcomes." Working Paper No. 2011-002, Human Capital and Ecnomic Opportunity Working Group, Economic Research Center, University of Chicago, October 2011.
2. Heckman, James J.
Schmierer, Daniel A.
Urzua, Sergio
Testing the Correlated Random Coefficient Model
Working Paper No. 15463. National Bureau of Economic Research, October 2009.
Also: http://www.nber.org/papers/w15463
Cohort(s): NLSY79
Publisher: National Bureau of Economic Research (NBER)
Keyword(s): Armed Forces Qualifications Test (AFQT); Heterogeneity; High School Completion/Graduates; Modeling; Schooling, Post-secondary; Variables, Instrumental; Wages

The recent literature on instrumental variables (IV) features models in which agents sort into treatment status on the basis of gains from treatment as well as on baseline-pretreatment levels. Components of the gains known to the agents and acted on by them may not be known by the observing economist. Such models are called correlated random coefficient models. Sorting on unobserved components of gains complicates the interpretation of what IV estimates. This paper examines testable implications of the hypothesis that agents do not sort into treatment based on gains. In it, we develop new tests to gauge the empirical relevance of the correlated random coefficient model to examine whether the additional complications associated with it are required. We examine the power of the proposed tests. We derive a new representation of the variance of the instrumental variable estimator for the correlated random coefficient model. We apply the methods in this paper to the prototypical empirical problem of estimating the return to schooling and ˝find evidence of sorting into schooling based on unobserved components of gains.
Bibliography Citation
Heckman, James J., Daniel A. Schmierer and Sergio Urzua. "Testing the Correlated Random Coefficient Model." Working Paper No. 15463. National Bureau of Economic Research, October 2009.
3. Heckman, James J.
Stixrud, Jora
Urzua, Sergio
The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior
Journal of Labor Economics 24,3 (July 2006): 411-482.
Also: http://www.jstor.org/stable/10.1086/504455
Cohort(s): Children of the NLSY79, NLSY79
Publisher: University of Chicago Press
Keyword(s): Academic Development; Adolescent Behavior; Armed Forces Qualifications Test (AFQT); Armed Services Vocational Aptitude Battery (ASVAB); Cognitive Ability; Cognitive Development; Crime; Educational Returns; Employment; Labor Market Outcomes; Locus of Control (see Rotter Scale); Noncognitive Skills; Occupational Choice; Risk-Taking; Rosenberg Self-Esteem Scale (RSES) (see Self-Esteem); Rotter Scale (see Locus of Control); Schooling; Skills; Substance Use; Wages; Work Experience

This article establishes that a low-dimensional vector of cognitive and noncognitive skills explains a variety of labor market and behavioral outcomes. Our analysis addresses the problems of measurement error, imperfect proxies, and reverse causality that plague conventional studies. Noncognitive skills strongly influence schooling decisions and also affect wages, given schooling decisions. Schooling, employment, work experience, and choice of occupation are affected by latent noncognitive and cognitive skills. We show that the same low-dimensional vector of abilities that explains schooling choices, wages, employment, work experience, and choice of occupation explains a wide variety of risky behaviors.
Bibliography Citation
Heckman, James J., Jora Stixrud and Sergio Urzua. "The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior." Journal of Labor Economics 24,3 (July 2006): 411-482.
4. Heckman, James J.
Urzua, Sergio
Vytlacil, Edward
Supplement to "Understanding Instrumental Variables in Models with Essential Heterogeneity"
Working Paper, Department of Economics, The University of Chicago, December 2004.
Also: http://jenni.uchicago.edu/underiv/appendixwebpage_all_16_12_04.pdf
Cohort(s): NLSY79
Publisher: Department of Economics, The University of Chicago
Keyword(s): Armed Services Vocational Aptitude Battery (ASVAB); GED/General Educational Diploma/General Equivalency Degree/General Educational Development; Heterogeneity; High School Dropouts; Modeling

Permission to reprint the abstract has not been received from the publisher.

Supplement available on-line at: http://jenni.uchicago.edu/underiv/appendixwebpage_all_16_12_04.pdf
Bibliography Citation
Heckman, James J., Sergio Urzua and Edward Vytlacil. "Supplement to "Understanding Instrumental Variables in Models with Essential Heterogeneity"." Working Paper, Department of Economics, The University of Chicago, December 2004.
5. Heckman, James J.
Vytlacil, Edward
Urzua, Sergio
Understanding Instrumental Variables in Models with Essential Heterogeneity
IZA Discussion Paper No. 2320, Institute for the Study of Labor (IZA), September 2006.
Also: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=936692
Cohort(s): NLSY79
Publisher: Institute for the Study of Labor (IZA)
Keyword(s): Heterogeneity; High School Completion/Graduates; Variables, Instrumental; Wages

Permission to reprint the abstract has not been received from the publisher.

This paper examines the properties of instrumental variables (IV) applied to models with essential heterogeneity, that is, models where responses to interventions are heterogeneous and agents adopt treatments (participate in programs) with at least partial knowledge of their idiosyncratic response. We analyze two-outcome and multiple-outcome models including ordered and unordered choice models. We allow for transition-specific and general instruments. We generalize previous analyses by developing weights for treatment effects for general instruments. We develop a simple test for the presence of essential heterogeneity. We note the asymmetry of the model of essential heterogeneity: outcomes of choices are heterogeneous in a general way; choices are not. When both choices and outcomes are permitted to be symmetrically heterogeneous, the method of IV breaks down for estimating treatment parameters.
Bibliography Citation
Heckman, James J., Edward Vytlacil and Sergio Urzua. "Understanding Instrumental Variables in Models with Essential Heterogeneity." IZA Discussion Paper No. 2320, Institute for the Study of Labor (IZA), September 2006.
6. Prada, Maria F.
Urzua, Sergio
One Size does not Fit All: Multiple Dimensions of Ability, College Attendance and Wages
NBER Working Paper No. 20752, National Bureau of Economic Research, December 2014.
Also: http://www.nber.org/papers/w20752
Cohort(s): NLSY79
Publisher: National Bureau of Economic Research (NBER)
Keyword(s): Armed Services Vocational Aptitude Battery (ASVAB); Cognitive Ability; College Education; Labor Market Outcomes; Rosenberg Self-Esteem Scale (RSES) (see Self-Esteem); Rotter Scale (see Locus of Control); Wages

We investigate the role of mechanical ability as another dimension that, jointly with cognitive and socio-emotional, affects schooling decisions and labor market outcomes. Using a Roy model with a factor structure and data from the NLSY79, we show that the labor market positively rewards mechanical ability. However, in contrast to the other dimensions, mechanical ability reduces the likelihood of attending four-year college. We find that, on average, for individuals with high levels of mechanical and low levels of cognitive and socio-emotional ability, not attending four-year college is the alternative associated with the highest hourly wage (ages 25-30).
Bibliography Citation
Prada, Maria F. and Sergio Urzua. "One Size does not Fit All: Multiple Dimensions of Ability, College Attendance and Wages." NBER Working Paper No. 20752, National Bureau of Economic Research, December 2014.
7. Urzua, Sergio
Racial Labor Market Gaps: The Role of Abilities and Schooling Choices
Journal of Human Resources 43,4 (Fall 2008): 919-971.
Also: http://jhr.uwpress.org/content/43/4/919.abstract
Cohort(s): NLSY79
Publisher: University of Wisconsin Press
Keyword(s): Cognitive Ability; Earnings; Educational Aspirations/Expectations; Family Background; Labor Market Outcomes; Racial Differences; Schooling; Test Scores/Test theory/IRT

This paper studies the relationship between abilities, schooling choices, and black-white differentials in labor market outcomes. The analysis is based on a model of endogenous schooling choices. Agents' schooling decisions are based on expected future earnings, family background, and unobserved abilities. Earnings are also determined by unobserved abilities. The analysis distinguishes unobserved abilities from observed test scores. The model is implemented using data from the NLSY79. The results indicate that, even after controlling for abilities, there exist significant racial labor market gaps. They also suggest that the standard practice of equating observed test scores may overcompensate for differentials in ability.
Bibliography Citation
Urzua, Sergio. "Racial Labor Market Gaps: The Role of Abilities and Schooling Choices." Journal of Human Resources 43,4 (Fall 2008): 919-971.
8. Urzua, Sergio
Prada, Maria F.
One Size Does Not Fit All: Multiple Dimensions of Ability, College Attendance and Earnings
Journal of Labor Economics 35,4 (October 2017): 953-991.
Also: http://www.journals.uchicago.edu/doi/abs/10.1086/692477
Cohort(s): NLSY79
Publisher: University of Chicago Press
Keyword(s): Armed Services Vocational Aptitude Battery (ASVAB); Cognitive Ability; College Education; Earnings

This paper investigates the role of mechanical ability as a determinant of school decisions and labor market outcomes. Using a Roy model of with multiple unobserved abilities and longitudinal data from the NLSY79, we find that this ability has a positive effect on overall earnings. However, in contrast to cognitive and socio-emotional, mechanical ability reduces the likelihood of attending a four-year college. The rationale for this asymmetry comes from its large estimated impact of earnings conditional on not attending four-year college. Our findings highlight the importance of moving beyond the one-size-fits-all discourses to offer individuals alternative educational pathways to successful careers.
Bibliography Citation
Urzua, Sergio and Maria F. Prada. "One Size Does Not Fit All: Multiple Dimensions of Ability, College Attendance and Earnings." Journal of Labor Economics 35,4 (October 2017): 953-991.