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Title: A Parametric Control Function Approach to Estimating the Returns to Schooling in the Absence of Exclusion Restrictions: An Application to the NLSY
Resulting in 1 citation.
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Farré, Lídia Klein, Roger Vella, Francis |
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A Parametric Control Function Approach to Estimating the Returns to Schooling in the Absence of Exclusion Restrictions: An Application to the NLSY Empirical Economics 44,1 (February 2013):111-133. Also: http://link.springer.com/article/10.1007/s00181-010-0376-5 Cohort(s): NLSY79 Publisher: Springer Keyword(s): Educational Returns; Endogeneity; Schooling; Variables, Instrumental Permission to reprint the abstract has not been received from the publisher. An innovation which bypasses the need for instruments when estimating endogenous treatment effects is identification via conditional second moments. The most general of these approaches is Klein and Vella (J Econom 154:154–164, 2010), which models the conditional variances semiparametrically. While this is attractive, as identification is not reliant on parametric assumptions for variances, the nonparametric aspect of the estimation may discourage practitioners from its use. This paper outlines how the estimator can be implemented parametrically. The use of parametric assumptions is accompanied by a large reduction in computational and programming demands. We illustrate the approach by estimating the return to education using a sample drawn from the National Longitudinal Survey of Youth 1979. Accounting for endogeneity increases the estimate of the return to education from 6.8 to 11.2%. |
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Bibliography Citation
Farré, Lídia, Roger Klein and Francis Vella. "A Parametric Control Function Approach to Estimating the Returns to Schooling in the Absence of Exclusion Restrictions: An Application to the NLSY." Empirical Economics 44,1 (February 2013):111-133.
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