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Arnaud Maurel

Duke University, Economics, Faculty Member

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marzio cassandro

Liviana Palmisano

St.Petersburg state University (Russian Federation)

Grigor Barsegian

Avetik Sahakyan

Universidade de São Paulo

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Papers by Arnaud Maurel

Inference on a Generalized Roy Model, with an Application to Schooling Decisions in France

Social Science Research Network, 2009

This paper considers the identification and estimation of an extension of Roy's model (1951) of o... more This paper considers the identification and estimation of an extension of Roy's model (1951) of occupational choice, which includes a non-pecuniary component in the decision equation and allows for uncertainty on the potential earnings. This framework is well suited to various economic contexts, including educational and sectoral choices, or migration decisions. We show that the effects of covariates on earnings are identified under exclusion restrictions or at infinity. The non-pecuniary component can then be point or set identified without any other exclusion restriction, using the detailed structure of the model alone. Point identification is achieved if at least one covariate is continuous, while bounds are obtained otherwise. As a result, the distribution of the ex ante monetary returns can be point or set identified without any instrument. We propose a three-stage semiparametric estimation procedure for this model, which yields root-n consistent and asymptotically normal estimators. We apply our results to the educational context, by providing new evidence from French data that non-pecuniary factors are a key determinant of higher education attendance decisions.

The Analysis of Field Choice in College and Graduate School

Handbook of the economics of education, 2016

As the workforce has become more educated, educational decisions are no longer just about whether... more As the workforce has become more educated, educational decisions are no longer just about whether to acquire more, but rather what type of education to pursue. In college, individuals somewhat specialize through their choice of college major. Further specialization occurs in graduate school. This chapter investigates how majors and graduate school affect labor market outcomes as well as how the individuals make these potentially important decisions. To do so, we develop a dynamic model of educational decision-making. In light of the model, we examine the estimation issues associated with obtaining causal effects of educational choices on earnings. We then examine ways that authors have overcome the selection problem as well as the approaches authors have taken to estimate the process by which these educational decisions are made. * We thank Magne Mogstad, Matt Wiswall, and Seth Zimmerman for helpful comments. Luis Candelaria,

Recovering Ex Ante Returns and Preferences for Occupations Using Subjective Expectations Data

Social Science Research Network, 2014

We show that data on subjective expectations, especially on outcomes from counterfactual choices ... more We show that data on subjective expectations, especially on outcomes from counterfactual choices and choice probabilities, are a powerful tool in recovering ex ante treatment effects as well as preferences for different treatments. In this paper we focus on the choice of occupation, and use elicited beliefs from a sample of male undergraduates at Duke University. By asking individuals about potential earnings associated with counterfactual choices of college majors and occupations, we can recover the distribution of the ex ante monetary returns to particular occupations, and how these returns vary across majors. We then propose a model of occupational choice which allows us to link subjective data on earnings and choice probabilities with the non-pecuniary preferences for each occupation. We find large differences in expected earnings across occupations, and substantial heterogeneity across individuals in the corresponding ex ante returns. However, while sorting across occupations is partly driven by the ex ante monetary returns, non-monetary factors play a key role in this decision. Finally, our results point to the existence of sizable complementarities between college major and occupations, both in terms of earnings and non-monetary benefits.

Changes across Cohorts in Wage Returns to Schooling and Early Work Experiences

RePEc: Research Papers in Economics, Dec 1, 2017

Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research pu... more Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world's largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.

Inference on an extended Roy model, with an application to schooling decisions in France

Journal of Econometrics, Jun 1, 2013

In this appendix we discuss some Monte Carlo simulations to evaluate the accuracy of our three-st... more In this appendix we discuss some Monte Carlo simulations to evaluate the accuracy of our three-stage estimator in finite samples. We then provide some descriptives and details on the computation of the stream of earnings in the application, as well as additional results and robustness checks. Finally, the third section is devoted to the proofs of our results.

Choosing the Field of Study in Post-Secondary Education: Do Expected Earnings Matter?

Social Science Research Network, 2009

Choosing the Field of Study in Post-Secondary Education: Do Expected Earnings Matter? * This pape... more Choosing the Field of Study in Post-Secondary Education: Do Expected Earnings Matter? * This paper examines the determinants of the choice of the major when the length of studies is uncertain, by using a framework in which students entering post-secondary education are assumed to anticipate their future earnings. For that purpose, we use French data coming from the 1992 and 1998 Génération surveys collected by the Centre d'Etudes et de Recherches sur l'Emploi et les Qualifications (CEREQ, Marseille). Our econometric approach is based on a semi-structural three-equations model, which is identified thanks to some exclusion restrictions. We exploit in particular exogenous variations in the earnings returns associated with the majors across the business cycle, in order to identify the causal effect of expected earnings on the probability of choosing a given major. Relying on a threecomponent mixture distribution, we account for correlation between the unobserved individual-specific terms affecting the preferences for the majors, the unobserved individualspecific factors entering the equation determining the length of studies within each major, and that affecting the labor market earnings equation. Following Arcidiacono and Jones (2003), we use the EM algorithm with a sequential maximization step to produce consistent parameter estimates. Simulating for each given major a 10 percent increase in the expected earnings suggests that expected earnings have a statistically significant but quantitatively small impact on the allocation of students across majors.

Extremal Quantile Regressions for Selection Models and the Black-White Wage Gap

Extremal Quantile Regressions for Selection Models and the Black-White Wage Gap * We consider the... more Extremal Quantile Regressions for Selection Models and the Black-White Wage Gap * We consider the estimation of a semiparametric location-scale model subject to endogenous selection, in the absence of an instrument or a large support regressor. Identification relies on the independence between the covariates and selection, for arbitrarily large values of the outcome. In this context, we propose a simple estimator, which combines extremal quantile regressions with minimum distance. We establish the asymptotic normality of this estimator by extending previous results on extremal quantile regressions to allow for selection. Finally, we apply our method to estimate the black-white wage gap among males from the NLSY79 and NLSY97. We find that premarket factors such as AFQT and family background characteristics play a key role in explaining the level and evolution of the black-white wage gap.

Rationalizing Rational Expectations? Tests and Deviations

Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research pu... more Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world's largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.

Another Look at the Identification at Infinity of Sample Selection Models

Econometric Theory, Jul 6, 2012

Another Look at the Identification at Infinity of Sample Selection Models * It is often believed ... more Another Look at the Identification at Infinity of Sample Selection Models * It is often believed that without instrument, endogenous sample selection models are identified only if a covariate with a large support is available (see Chamberlain, 1986, and Lewbel, 2007). We propose a new identification strategy mainly based on the condition that the selection variable becomes independent of the covariates when the outcome, not one of the covariates, tends to infinity. No large support on the covariates is required. Moreover, we prove that this condition is testable. We finally show that our strategy can also be applied to the identification of generalized Roy models.

The Analysis of Field Choice in College and Graduate School: Determinants and Wage Effects

As the workforce has become more educated, educational decisions are no longer just about whether... more As the workforce has become more educated, educational decisions are no longer just about whether to acquire more, but rather what type of education to pursue. In college, individuals somewhat specialize through their choice of college major. Further specialization occurs in graduate school. This chapter investigates how majors and graduate school affect labor market outcomes as well as how the individuals make these potentially important decisions. To do so, we develop a dynamic model of educational decision-making. In light of the model, we examine the estimation issues associated with obtaining causal effects of educational choices on earnings. We then examine ways that authors have overcome the selection problem as well as the approaches authors have taken to estimate the process by which these educational decisions are made.

A Structural Dynamic Analysis of Over-Education and Mismatch

More than half of American and European workers have a level of education that does not match the... more More than half of American and European workers have a level of education that does not match the level of education required for their job. A majority of these has more schooling than necessary to perform their job, and is deemed overeducated in the economics. A key motivation for this project is to go beyond stylized facts and understand the determinants and implications of over-education. The goal of this research is threefold. First, we will investigate the effect of educational mismatch on wages using data from the National Longitudinal Survey of Youth 1979 (NLSY79). Second, we will attempt to disentangle the different mechanisms contributing to over-education. Quantifying the importance of job search inefficiencies, versus other factors such as unobserved ability, non-pecuniary job benefits or career mobility prospects is crucial from a policy viewpoint. The third objective of our analysis will be to consider gender, race and socioeconomic heterogeneity in the risk of overeducatio

Informational Content of Factor Structures in Simultaneous Binary Response Models

Advances in econometrics, Apr 24, 2023

We study the informational content of factor structures in discrete triangular systems. Factor st... more We study the informational content of factor structures in discrete triangular systems. Factor structures have been employed in a variety of settings in cross sectional and panel data models, and in this paper we formally quantify their identifying power in a bivariate system often employed in the treatment effects literature. Our main findings are that imposing a factor structure yields point identification of parameters of interest, such as the coefficient associated with the endogenous regressor in the outcome equation, under weaker assumptions than usually required in these systems. In particular, we show that an exclusion restriction, requiring an explanatory variable in the outcome equation to be excluded from the treatment equation, is no longer necessary for identification. Under such settings, we propose a rank estimator for both the factor loading and the causal effect parameter that are root-n consistent and asymptotically normal. The estimator's finite sample properties are evaluated through a simulation study. We also establish identification results in models with more general factor structures, that are characterized by nonparametric functional forms and multiple idiosyncratic shocks.

Rationalizing Rational Expectations. Tests and Deviations [R package RationalExp version 0.2.2]

In this paper, we build a new test of rational expectations based on the marginal distributions o... more In this paper, we build a new test of rational expectations based on the marginal distributions of realizations and subjective beliefs. This test is widely applicable, including in the common situation where realizations and beliefs are observed in two different datasets that cannot be matched. We show that whether one can rationalize rational expectations is equivalent to the distribution of realizations being a mean-preserving spread of the distribution of beliefs. The null hypothesis can then be rewritten as a system of many moment inequality and equality constraints, for which tests have been recently developed in the literature. Next, we go beyond testing by defining and estimating the minimal deviations from rational expectations that can be rationalized by the data. In the context of structural models, we build on this concept to propose an easy-to-implement way to conduct a sensitivity analysis on the assumed form of expectations. Finally, we apply our framework to test for and quantify deviations from rational expectations about future earnings, and examine the consequences of such departures in the context of a life-cycle model of consumption.

Rationalizing Rational Expectations: Characterization and Tests

arXiv (Cornell University), Mar 25, 2020

In this paper, we build a new test of rational expectations based on the marginal distributions o... more In this paper, we build a new test of rational expectations based on the marginal distributions of realizations and subjective beliefs. This test is widely applicable, including in the common situation where realizations and beliefs are observed in two different datasets that cannot be matched. We show that whether one can rationalize rational expectations is equivalent to the distribution of realizations being a mean-preserving spread of the distribution of beliefs. The null hypothesis can then be rewritten as a system of many moment inequality and equality constraints, for which tests have been recently developed in the literature. The test is robust to measurement errors under some restrictions and can be extended to account for aggregate shocks. Finally, we apply our methodology to test for rational expectations about future earnings. While individuals tend to be right on average about their future earnings, our test strongly rejects rational expectations.

Estimating selection models without an instrument with Stata

Stata Journal, Jun 1, 2020

Zhang acknowledges the financial support from Singapore Ministry of Education Tier 2 grant under ... more Zhang acknowledges the financial support from Singapore Ministry of Education Tier 2 grant under grant no. MOE2018-T2-2-169. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Rationalizing rational expectations: Characterizations and tests

Quantitative Economics, 2021

In this paper, we build a new test of rational expectations based on the marginal distributions o... more In this paper, we build a new test of rational expectations based on the marginal distributions of realizations and subjective beliefs. This test is widely applicable, including in the common situation where realizations and beliefs are observed in two different datasets that cannot be matched. We show that whether one can rationalize rational expectations is equivalent to the distribution of realizations being a mean-preserving spread of the distribution of beliefs. The null hypothesis can then be rewritten as a system of many moment inequality and equality constraints, for which tests have been recently developed in the literature. The test is robust to measurement errors under some restrictions and can be extended to account for aggregate shocks. Finally, we apply our methodology to test for rational expectations about future earnings. While individuals tend to be right on average about their future earnings, our test strongly rejects rational expectations.

Quatre essais sur l'analyse microéconométrique de la demande d'éducation post-secondaire

Cette these contient quatre essais relatifs a l'analyse microeconometrique de la demande d&#3... more Cette these contient quatre essais relatifs a l'analyse microeconometrique de la demande d'education post-secondaire. Nous y etudions de plusieurs points de vue les choix educatifs des individus ayant termine leurs etudes secondaires, chacun de ces points de vue fournissant la matiere d'un chapitre de cette these. Les deux premiers chapitres examinent les determinants de ces choix educatifs, en analysant respectivement la decision de poursuivre des etudes superieures et le choix de filiere universitaire. Ces chapitres mettent tous deux en avant l'influence majeure des facteurs non-pecuniaires dans le processus de choix d'education post-secondaire. Le troisieme et dernier chapitre est consacre a la question connexe du financement des etudes superieures, abordee sous l'angle du cumul emploi-etudes et de son effet sur la reussite scolaire.

Identification and Estimation of Continuous-Time Job Search Models with Preference Shocks

NBER working papers are circulated for discussion and comment purposes. They have not been peer-r... more

ABSTRACT Extremal Quantile Regressions for Selection Models and the Black-White Wage Gap *

Extremal Quantile Regressions for Selection Models and the Black-White Wage Gap * We consider the... more Extremal Quantile Regressions for Selection Models and the Black-White Wage Gap * We consider the estimation of a semiparametric location-scale model subject to endogenous selection, in the absence of an instrument or a large support regressor. Identification relies on the independence between the covariates and selection, for arbitrarily large values of the outcome. In this context, we propose a simple estimator, which combines extremal quantile regressions with minimum distance. We establish the asymptotic normality of this estimator by extending previous results on extremal quantile regressions to allow for selection. Finally, we apply our method to estimate the black-white wage gap among males from the NLSY79 and NLSY97. We find that premarket factors such as AFQT and family background characteristics play a key role in explaining the level and evolution of the black-white wage gap.

4. Quels sont les déterminants des choix d’orientation dans l’enseignement supérieur ?

Regards croisés sur l'économie, Oct 15, 2015

Les etudiants qui decident de poursuivre des etudes superieures sont confrontes a des choix d’ori... more Les etudiants qui decident de poursuivre des etudes superieures sont confrontes a des choix d’orientation complexes qui ont des consequences majeures en termes de salaires et de trajectoire professionnelle. Il est crucial de comprendre comment ces decisions sont formees, afin notamment d’aboutir a des politiques publiques permettant d’inflechir les inegalites d’acces aux differents cursus. La recherche en economie sur cette question met l’accent sur le role essentiel joue par les preferences et les aptitudes pour les differents types de formations, sur l’importance des imperfections d’information ainsi que sur l’effet du revenu familial sur l’orientation des etudiants.

Inference on a Generalized Roy Model, with an Application to Schooling Decisions in France

Social Science Research Network, 2009

This paper considers the identification and estimation of an extension of Roy's model (1951) of o... more This paper considers the identification and estimation of an extension of Roy's model (1951) of occupational choice, which includes a non-pecuniary component in the decision equation and allows for uncertainty on the potential earnings. This framework is well suited to various economic contexts, including educational and sectoral choices, or migration decisions. We show that the effects of covariates on earnings are identified under exclusion restrictions or at infinity. The non-pecuniary component can then be point or set identified without any other exclusion restriction, using the detailed structure of the model alone. Point identification is achieved if at least one covariate is continuous, while bounds are obtained otherwise. As a result, the distribution of the ex ante monetary returns can be point or set identified without any instrument. We propose a three-stage semiparametric estimation procedure for this model, which yields root-n consistent and asymptotically normal estimators. We apply our results to the educational context, by providing new evidence from French data that non-pecuniary factors are a key determinant of higher education attendance decisions.

The Analysis of Field Choice in College and Graduate School

Handbook of the economics of education, 2016

As the workforce has become more educated, educational decisions are no longer just about whether... more As the workforce has become more educated, educational decisions are no longer just about whether to acquire more, but rather what type of education to pursue. In college, individuals somewhat specialize through their choice of college major. Further specialization occurs in graduate school. This chapter investigates how majors and graduate school affect labor market outcomes as well as how the individuals make these potentially important decisions. To do so, we develop a dynamic model of educational decision-making. In light of the model, we examine the estimation issues associated with obtaining causal effects of educational choices on earnings. We then examine ways that authors have overcome the selection problem as well as the approaches authors have taken to estimate the process by which these educational decisions are made. * We thank Magne Mogstad, Matt Wiswall, and Seth Zimmerman for helpful comments. Luis Candelaria,

Recovering Ex Ante Returns and Preferences for Occupations Using Subjective Expectations Data

Social Science Research Network, 2014

We show that data on subjective expectations, especially on outcomes from counterfactual choices ... more We show that data on subjective expectations, especially on outcomes from counterfactual choices and choice probabilities, are a powerful tool in recovering ex ante treatment effects as well as preferences for different treatments. In this paper we focus on the choice of occupation, and use elicited beliefs from a sample of male undergraduates at Duke University. By asking individuals about potential earnings associated with counterfactual choices of college majors and occupations, we can recover the distribution of the ex ante monetary returns to particular occupations, and how these returns vary across majors. We then propose a model of occupational choice which allows us to link subjective data on earnings and choice probabilities with the non-pecuniary preferences for each occupation. We find large differences in expected earnings across occupations, and substantial heterogeneity across individuals in the corresponding ex ante returns. However, while sorting across occupations is partly driven by the ex ante monetary returns, non-monetary factors play a key role in this decision. Finally, our results point to the existence of sizable complementarities between college major and occupations, both in terms of earnings and non-monetary benefits.

Changes across Cohorts in Wage Returns to Schooling and Early Work Experiences

RePEc: Research Papers in Economics, Dec 1, 2017

Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research pu... more Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world's largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.

Inference on an extended Roy model, with an application to schooling decisions in France

Journal of Econometrics, Jun 1, 2013

In this appendix we discuss some Monte Carlo simulations to evaluate the accuracy of our three-st... more In this appendix we discuss some Monte Carlo simulations to evaluate the accuracy of our three-stage estimator in finite samples. We then provide some descriptives and details on the computation of the stream of earnings in the application, as well as additional results and robustness checks. Finally, the third section is devoted to the proofs of our results.

Choosing the Field of Study in Post-Secondary Education: Do Expected Earnings Matter?

Social Science Research Network, 2009

Choosing the Field of Study in Post-Secondary Education: Do Expected Earnings Matter? * This pape... more Choosing the Field of Study in Post-Secondary Education: Do Expected Earnings Matter? * This paper examines the determinants of the choice of the major when the length of studies is uncertain, by using a framework in which students entering post-secondary education are assumed to anticipate their future earnings. For that purpose, we use French data coming from the 1992 and 1998 Génération surveys collected by the Centre d'Etudes et de Recherches sur l'Emploi et les Qualifications (CEREQ, Marseille). Our econometric approach is based on a semi-structural three-equations model, which is identified thanks to some exclusion restrictions. We exploit in particular exogenous variations in the earnings returns associated with the majors across the business cycle, in order to identify the causal effect of expected earnings on the probability of choosing a given major. Relying on a threecomponent mixture distribution, we account for correlation between the unobserved individual-specific terms affecting the preferences for the majors, the unobserved individualspecific factors entering the equation determining the length of studies within each major, and that affecting the labor market earnings equation. Following Arcidiacono and Jones (2003), we use the EM algorithm with a sequential maximization step to produce consistent parameter estimates. Simulating for each given major a 10 percent increase in the expected earnings suggests that expected earnings have a statistically significant but quantitatively small impact on the allocation of students across majors.

Extremal Quantile Regressions for Selection Models and the Black-White Wage Gap

Extremal Quantile Regressions for Selection Models and the Black-White Wage Gap * We consider the... more Extremal Quantile Regressions for Selection Models and the Black-White Wage Gap * We consider the estimation of a semiparametric location-scale model subject to endogenous selection, in the absence of an instrument or a large support regressor. Identification relies on the independence between the covariates and selection, for arbitrarily large values of the outcome. In this context, we propose a simple estimator, which combines extremal quantile regressions with minimum distance. We establish the asymptotic normality of this estimator by extending previous results on extremal quantile regressions to allow for selection. Finally, we apply our method to estimate the black-white wage gap among males from the NLSY79 and NLSY97. We find that premarket factors such as AFQT and family background characteristics play a key role in explaining the level and evolution of the black-white wage gap.

Rationalizing Rational Expectations? Tests and Deviations

Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research pu... more Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world's largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.

Another Look at the Identification at Infinity of Sample Selection Models

Econometric Theory, Jul 6, 2012

Another Look at the Identification at Infinity of Sample Selection Models * It is often believed ... more Another Look at the Identification at Infinity of Sample Selection Models * It is often believed that without instrument, endogenous sample selection models are identified only if a covariate with a large support is available (see Chamberlain, 1986, and Lewbel, 2007). We propose a new identification strategy mainly based on the condition that the selection variable becomes independent of the covariates when the outcome, not one of the covariates, tends to infinity. No large support on the covariates is required. Moreover, we prove that this condition is testable. We finally show that our strategy can also be applied to the identification of generalized Roy models.

The Analysis of Field Choice in College and Graduate School: Determinants and Wage Effects

As the workforce has become more educated, educational decisions are no longer just about whether... more As the workforce has become more educated, educational decisions are no longer just about whether to acquire more, but rather what type of education to pursue. In college, individuals somewhat specialize through their choice of college major. Further specialization occurs in graduate school. This chapter investigates how majors and graduate school affect labor market outcomes as well as how the individuals make these potentially important decisions. To do so, we develop a dynamic model of educational decision-making. In light of the model, we examine the estimation issues associated with obtaining causal effects of educational choices on earnings. We then examine ways that authors have overcome the selection problem as well as the approaches authors have taken to estimate the process by which these educational decisions are made.

A Structural Dynamic Analysis of Over-Education and Mismatch

More than half of American and European workers have a level of education that does not match the... more More than half of American and European workers have a level of education that does not match the level of education required for their job. A majority of these has more schooling than necessary to perform their job, and is deemed overeducated in the economics. A key motivation for this project is to go beyond stylized facts and understand the determinants and implications of over-education. The goal of this research is threefold. First, we will investigate the effect of educational mismatch on wages using data from the National Longitudinal Survey of Youth 1979 (NLSY79). Second, we will attempt to disentangle the different mechanisms contributing to over-education. Quantifying the importance of job search inefficiencies, versus other factors such as unobserved ability, non-pecuniary job benefits or career mobility prospects is crucial from a policy viewpoint. The third objective of our analysis will be to consider gender, race and socioeconomic heterogeneity in the risk of overeducatio

Informational Content of Factor Structures in Simultaneous Binary Response Models

Advances in econometrics, Apr 24, 2023

We study the informational content of factor structures in discrete triangular systems. Factor st... more We study the informational content of factor structures in discrete triangular systems. Factor structures have been employed in a variety of settings in cross sectional and panel data models, and in this paper we formally quantify their identifying power in a bivariate system often employed in the treatment effects literature. Our main findings are that imposing a factor structure yields point identification of parameters of interest, such as the coefficient associated with the endogenous regressor in the outcome equation, under weaker assumptions than usually required in these systems. In particular, we show that an exclusion restriction, requiring an explanatory variable in the outcome equation to be excluded from the treatment equation, is no longer necessary for identification. Under such settings, we propose a rank estimator for both the factor loading and the causal effect parameter that are root-n consistent and asymptotically normal. The estimator's finite sample properties are evaluated through a simulation study. We also establish identification results in models with more general factor structures, that are characterized by nonparametric functional forms and multiple idiosyncratic shocks.

Rationalizing Rational Expectations. Tests and Deviations [R package RationalExp version 0.2.2]

In this paper, we build a new test of rational expectations based on the marginal distributions o... more In this paper, we build a new test of rational expectations based on the marginal distributions of realizations and subjective beliefs. This test is widely applicable, including in the common situation where realizations and beliefs are observed in two different datasets that cannot be matched. We show that whether one can rationalize rational expectations is equivalent to the distribution of realizations being a mean-preserving spread of the distribution of beliefs. The null hypothesis can then be rewritten as a system of many moment inequality and equality constraints, for which tests have been recently developed in the literature. Next, we go beyond testing by defining and estimating the minimal deviations from rational expectations that can be rationalized by the data. In the context of structural models, we build on this concept to propose an easy-to-implement way to conduct a sensitivity analysis on the assumed form of expectations. Finally, we apply our framework to test for and quantify deviations from rational expectations about future earnings, and examine the consequences of such departures in the context of a life-cycle model of consumption.

Rationalizing Rational Expectations: Characterization and Tests

arXiv (Cornell University), Mar 25, 2020

In this paper, we build a new test of rational expectations based on the marginal distributions o... more In this paper, we build a new test of rational expectations based on the marginal distributions of realizations and subjective beliefs. This test is widely applicable, including in the common situation where realizations and beliefs are observed in two different datasets that cannot be matched. We show that whether one can rationalize rational expectations is equivalent to the distribution of realizations being a mean-preserving spread of the distribution of beliefs. The null hypothesis can then be rewritten as a system of many moment inequality and equality constraints, for which tests have been recently developed in the literature. The test is robust to measurement errors under some restrictions and can be extended to account for aggregate shocks. Finally, we apply our methodology to test for rational expectations about future earnings. While individuals tend to be right on average about their future earnings, our test strongly rejects rational expectations.

Estimating selection models without an instrument with Stata

Stata Journal, Jun 1, 2020

Zhang acknowledges the financial support from Singapore Ministry of Education Tier 2 grant under ... more Zhang acknowledges the financial support from Singapore Ministry of Education Tier 2 grant under grant no. MOE2018-T2-2-169. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Rationalizing rational expectations: Characterizations and tests

Quantitative Economics, 2021

In this paper, we build a new test of rational expectations based on the marginal distributions o... more In this paper, we build a new test of rational expectations based on the marginal distributions of realizations and subjective beliefs. This test is widely applicable, including in the common situation where realizations and beliefs are observed in two different datasets that cannot be matched. We show that whether one can rationalize rational expectations is equivalent to the distribution of realizations being a mean-preserving spread of the distribution of beliefs. The null hypothesis can then be rewritten as a system of many moment inequality and equality constraints, for which tests have been recently developed in the literature. The test is robust to measurement errors under some restrictions and can be extended to account for aggregate shocks. Finally, we apply our methodology to test for rational expectations about future earnings. While individuals tend to be right on average about their future earnings, our test strongly rejects rational expectations.

Quatre essais sur l'analyse microéconométrique de la demande d'éducation post-secondaire

Cette these contient quatre essais relatifs a l'analyse microeconometrique de la demande d&#3... more Cette these contient quatre essais relatifs a l'analyse microeconometrique de la demande d'education post-secondaire. Nous y etudions de plusieurs points de vue les choix educatifs des individus ayant termine leurs etudes secondaires, chacun de ces points de vue fournissant la matiere d'un chapitre de cette these. Les deux premiers chapitres examinent les determinants de ces choix educatifs, en analysant respectivement la decision de poursuivre des etudes superieures et le choix de filiere universitaire. Ces chapitres mettent tous deux en avant l'influence majeure des facteurs non-pecuniaires dans le processus de choix d'education post-secondaire. Le troisieme et dernier chapitre est consacre a la question connexe du financement des etudes superieures, abordee sous l'angle du cumul emploi-etudes et de son effet sur la reussite scolaire.

Identification and Estimation of Continuous-Time Job Search Models with Preference Shocks

NBER working papers are circulated for discussion and comment purposes. They have not been peer-r... more

ABSTRACT Extremal Quantile Regressions for Selection Models and the Black-White Wage Gap *

Extremal Quantile Regressions for Selection Models and the Black-White Wage Gap * We consider the... more Extremal Quantile Regressions for Selection Models and the Black-White Wage Gap * We consider the estimation of a semiparametric location-scale model subject to endogenous selection, in the absence of an instrument or a large support regressor. Identification relies on the independence between the covariates and selection, for arbitrarily large values of the outcome. In this context, we propose a simple estimator, which combines extremal quantile regressions with minimum distance. We establish the asymptotic normality of this estimator by extending previous results on extremal quantile regressions to allow for selection. Finally, we apply our method to estimate the black-white wage gap among males from the NLSY79 and NLSY97. We find that premarket factors such as AFQT and family background characteristics play a key role in explaining the level and evolution of the black-white wage gap.

4. Quels sont les déterminants des choix d’orientation dans l’enseignement supérieur ?

Regards croisés sur l'économie, Oct 15, 2015

Les etudiants qui decident de poursuivre des etudes superieures sont confrontes a des choix d’ori... more Les etudiants qui decident de poursuivre des etudes superieures sont confrontes a des choix d’orientation complexes qui ont des consequences majeures en termes de salaires et de trajectoire professionnelle. Il est crucial de comprendre comment ces decisions sont formees, afin notamment d’aboutir a des politiques publiques permettant d’inflechir les inegalites d’acces aux differents cursus. La recherche en economie sur cette question met l’accent sur le role essentiel joue par les preferences et les aptitudes pour les differents types de formations, sur l’importance des imperfections d’information ainsi que sur l’effet du revenu familial sur l’orientation des etudiants.