Abstract and Keywords
Chapter 19 surveys some of the key problems confronting empirical applications in labor economics and how panel data can be utilized to robustly estimate parameters of economic interest. Topics include whether and how to introduce heterogeneity in intercept and slope parameters; measurement errors in regressors; endogeneity bias and associated panel instrumental variables estimators; sample composition dynamics to control for selection on (un)observables; and model specification and selection issues such as a static or dynamic framework. The pedagogical framework for the discussion is the Mincer-type human-capital wage equation used in quantifying the value of statistical life (VSL) in labor market data. The application demonstrates that whether one controls for latent heterogeneity is more important than how, and conditional on latent heterogeneity, the range of VSL estimates is $6 million to $10 million with robust controls for measurement error, endogeneity, and dynamics.
Access to the complete content on Oxford Handbooks Online requires a subscription or purchase. Public users are able to search the site and view the abstracts and keywords for each book and chapter without a subscription.
If you have purchased a print title that contains an access token, please see the token for information about how to register your code.