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

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2014-06-01

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Abstract

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.

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Scholars@Duke

Maurel

Arnaud Maurel

Associate Professor of Economics

Professor Maurel’s research focuses on labor economics/education and microeconometrics. Most of his non-methodological work lies at the intersection between the economics of education and labor economics, with a focus on post-secondary education demand and occupational choices. On the methodological side, his research is concerned with the identification and estimation of selection and treatment effect models, as well as models of occupational choice and job search, and on data combination issues applied in particular to subjective expectations data. His most recent work has been published in such journals as the Journal of Political Economy, Journal of Labor Economics, Quantitative Economics, Journal of Econometrics and the Review of Economics and Statistics. He has received several research awards, notably the 2015 Dennis J. Aigner Award for the most significant contribution in empirical econometrics published by the Journal of Econometrics in 2013-2014. He is also a Research Associate at the NBER (Labor Studies) and IZA, a Co-Editor of Annals of Economics and Statistics, and Associate Editor at Quantitative Economics and the Journal of Business and Economic Statistics. 


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