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Methods in Labor Economics

77 2010 417458 fortin econ 560 lecture 0 laboratory

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Unformatted text preview: ctors, fake respondents Falk, Armin, Ernst Fehr and Christian Zehnder, “Fairness Perceptions and Reservation Wages—the Behavioral Effects of Minimum Wage Laws,” Quarterly Journal of Economics, Vol. 121 (November 2008), 1347-1381 But these are informative, but often small scale (because of costs) and offer variable scope for generalization Rise the issue of external validity Rise the issue of importance of question addressed Back to observational data, what about naïve regression analysis (i.e control for confounding variables)? Controlling for innate ability may reduce the upward bias in returns to schooling if higher ability individuals become more schooled Reduces omitted variable bias, but by how much??? Still suffer from reverse causality problem Fortin – Econ 560 Lecture 0 In the absence of a true experimental design, more econometrics that appeal to a clear source of identification (research design) can help Quasi-natural Experiments (QE): Differences-in-Differences estimation Card, D. “The Impact of the Mariel Boatlift on the Miami Labor Market," Industrial Labor Relations Review, Vol. 43 (January 1990): 245-257. Instrumental Variables (IV) Angrist, J.D. (1990) “Lifetime Earnings and the Vietnam Era Draft Lottery: Evidence from Social Security Administrative Records,” American Economic Review, 85: 1065--1087. Angrist J. and Alan Krueger, “Does Compulsory School Attendance Affect Schooling and Earnings?" Quarterly Journal of Economics, Vol 106 (Nov. 1991) 979-1014. Regression Discontinuity Designs (RDD) Oreopoulos, Phil. “Estimating Average and Local Average Treatment Effects of Education when Compulsory School Laws Really Matter”, American Economic Review, Vol. 96 (Mar., 2006) 152-175. Fortin – Econ 560 Lecture 0 Structural estimation attempts to recover the primitives of economic theory (parameters determining preferences or technology) o e.g. estimates of “the” elasticity of labour supply o can be added to a natural or a field experiment to analyze the impact of changing the parameters of the policy experiment Duflo, Esther, Rema Hanna, and Stephen P. Ryan, “Incentives Work: Getting Teachers to Come to Scho...
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