BucklesHungerman2011Lec - Sarah Hamersma 1/24/2011...

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Sarah Hamersma 1/24/2011 Summary/Notes for: Season of Birth and Later Outcomes: Old Questions, New Answers by Buckles and Hungerman (Aug 2010 draft) Key Issue: Attacking the validity of quarter-of-birth dummies as instrumental variables in models of later outcomes. The Point of This Paper: For quarter of birth to be a valid IV, it must not be directly correlated with outcomes of interest except through its relationship with the endogenous variable of interest (ex. yrs of education). These authors find that there are some systematic ex ante differences between people born in different quarters in terms of parental background, such that quarter of birth is indeed related to many outcomes, above and beyond its relationship via, say, years of education due to compulsory school attendance laws. Figure 1 They back this up with a more detailed analysis using regression analysis with some cohorts they create with census data. They find that Q of birth is much less predictive of wages/educ/etc. once one includes family background characteristics, although it still has some predictive power (a concern to which they return later). Implications for the IV:
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This note was uploaded on 06/07/2011 for the course ECO 7427 taught by Professor Hamersma during the Spring '08 term at University of Florida.

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BucklesHungerman2011Lec - Sarah Hamersma 1/24/2011...

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