Identification of Models of the Labor Market

Abstract

This chapter discusses identification of common selection models of the labor market. We start with the classic Roy model and show how it can be identified with exclusion restrictions. We then extend the argument to the generalized Roy model, treatment effect models, duration models, search models, and dynamic discrete choice models. In all cases, key ingredients for identification are exclusion restrictions and support conditions.

Keywords: Identification, Roy model, discrete choice, selection, treatment effects

JEL Classification: C14, C51, J22, J24