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The Empirical Content of the Roy Model

Econometrica 1990 58(5), 1121
This paper explores the robustness of the essential economic conclusions of the Roy model of self-selection and income inequality to relaxation of its normality assumptions. A log concave version of the model reproduces most of the main results. Log convex cases offer counterexamples. The authors show that in a Roy economy, random assignment is inegalitarian and Pareto inefficient. They consider nonparametric identifiability of latent skill distributions with cross-section and panel data. The authors' analysis proves nonparametric identifiability for the closely related competing risks model.

Self-Selection and the Distribution of Hourly Wages

Journal of Labor Economics 1990 8(1, Part 2), S329-S363
This article formulates and estimates alternative equilibrium models of industrial wage determination and self-selection. In explaining industrial wage differentials, we find that it is important to account for heterogeneous sector-specific skills and self-selection decisions by agents concerning their sector of employment. The classical Roy model is rejected. So is an efficiency units model of the labor market. A revised Roy model that accounts for comparative advantage in the choice of industrial sectors and choice between market and nonmarket work is much more successful in explaining cross-section wage distributions and their evolution over time.

The Relationship Between Wages and Income and the Timing and Spacing of Births: Evidence from Swedish Longitudinal Data

Econometrica 1990 58(6), 1411
"This paper estimates semiparametric reduced-form neoclassical models of life-cycle fertility in Sweden.... The estimated model integrates aspects of life cycle fertility that have previously been studied in isolation of each other: completed fertility, childlessness, interbirth intervals, and the time series of annual birth rates. The main objective of this paper is to determine which aspects of life cycle fertility, if any, are sensitive to male income and female wages."