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Identification of Models of the Labor Market

102 Pages Posted: 31 Aug 2010 Last revised: 27 Sep 2010

Eric French

Federal Reserve Bank of Chicago; Department of Economics

Christopher Taber

National Bureau of Economic Research (NBER); University of Wisconsin - Madison

Date Written: September 24, 2010

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

Suggested Citation

French, Eric and Taber, Christopher, Identification of Models of the Labor Market (September 24, 2010). FRB of Chicago Working Paper No. 2010-08. Available at SSRN: https://ssrn.com/abstract=1668790 or http://dx.doi.org/10.2139/ssrn.1668790

Eric French (Contact Author)

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604-1413
United States
312-322-5322 (Phone)
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Department of Economics ( email )

Gower Street
London, WC1E 6BT
United Kingdom

Christopher R. Taber

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Wisconsin - Madison ( email )

716 Langdon Street
Madison, WI 53706-1481
United States

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