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  5. Advances in Methods and Data: Control Functions, Multidimensional Matching, Occupational Mobility, and Psychological Mechanisms
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Advances in Methods and Data: Control Functions, Multidimensional Matching, Occupational Mobility, and Psychological Mechanisms

Paper Session

Saturday, Jan. 4, 2025 2:30 PM - 4:30 PM (PST)

Hilton San Francisco Union Square, Union Square 19 and 20
Hosted By: Korea-America Economic Association
  • Chair: Sokbae Lee, Columbia University

Set-Valued Control Functions

Sukjin Han
,
University of Bristol
Hiroaki Kaido
,
Boston University

Abstract

The control function approach allows the researcher to identify various causal effects
of interest. While powerful, it requires a strong invertibility assumption, which limits
its applicability. This paper expands the scope of the nonparametric control function
approach by allowing the control function to be set-valued and derive sharp bounds
on structural parameters. The proposed generalization accommodates a wide range of
selection processes involving discrete endogenous variables, random coefficients, treatment
selections with interference, and dynamic treatment selections.

Semi-Nonparametric Models of Multidimensional Matching: an Optimal Transport Approach

Dongwoo Kim
,
Simon Fraser University
Young Jun Lee
,
Korea Institute for International Economic Policy

Abstract

This paper proposes empirically tractable multidimensional matching models, focusing on worker-job matching. We generalize the parametric model proposed by Lindenlaub (2017), which relies on the assumption of joint normality of observed characteristics of workers and jobs. In our paper, we allow unrestricted distributions of characteristics and show identification of the production technology, and equilibrium wage and matching functions using tools from optimal transport theory. Given identification, we propose efficient, consistent, asymptotically normal sieve estimators. We revisit Lindenlaub's empirical application and show that, between 1990 and 2010, the U.S. economy experienced much larger technological progress favoring cognitive abilities than the original findings suggest. Furthermore, our flexible model specifications provide a significantly better fit for patterns in the evolution of wage inequality.

The Evolution of Black-White Differences in Occupational Mobility Across Post Civil War America

Steven Durlauf
,
University of Chicago
Gueyon Kim
,
University of California-Santa Cruz
Dohyeon Lee
,
Amazon
Xi Song
,
University of Pennsylvania

Abstract

This paper studies long-run differences in intergenerational occupational mobility between Black and White Americans. Combining data from linked historical censuses and contemporary large-scale surveys, we provide a comprehensive set of mobility measures based on Markov chains that trace out the short- and long-run dynamics of occupational differences. Our findings highlight the unique importance of changes in mobility experienced by the 1940–1950 birth cohorts in shaping the current occupational distribution and reducing the racial gap. We further explore the properties of continuing occupational inequalities and argue that these disparities are better understood by a lack of exchange mobility rather than structural mobility and as such, extrapolating contemporary occupational dynamics cannot be expected to disappear on their own.

Psychological Mechanisms for Eliciting Preferences and Beliefs

Evan Friedman
,
Paris School of Economics
Suanna Oh
,
Paris School of Economics
Duncan Webb
,
Paris School of Economics

Abstract

We propose and experimentally test two novel psychological mechanisms for improving answer quality in surveys. The ``bonus method'' offers additional payments mid-way through the survey, designed to see whether gift exchange effects can increase survey effort. The ``restatement method'' involves telling subjects that they will be asked a random subset of questions again at the end of the survey and receive payments for stating the answers they previously gave. The idea is that, by answering questions carefully, subjects may be better able to reconstruct their answers at a later time. A virtue of both methods is that they are easy to comprehend and can be applied to arbitrary questions, such as elicitation of subjective preferences or of beliefs about unobservable states of the world. We find that the bonus method has some promise: relative to providing no incentives or payments for correct answers, the method has small positive effects on both internal consistency and correctness of answers. The restatement method leads to a large increase in internal consistency; however, much of the effect appears driven by remembering earlier answers. Our findings suggest psychological mechanisms can increase survey effort, but this need not translate into improvements in answer quality.
JEL Classifications
  • C1 - Econometric and Statistical Methods and Methodology: General
  • C8 - Data Collection and Data Estimation Methodology; Computer Programs