Modeling structural equations with endogenous regressors and heterogeneity through derivative constraints

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dc.contributor.authorRau, Tomas
dc.date.accessioned2025-01-24T00:04:11Z
dc.date.available2025-01-24T00:04:11Z
dc.date.issued2013
dc.description.abstractIn this paper, I present a general modeling framework for nonparametric models with endogenous regressors and heterogeneity. I show that many existing models in the literature can be derived from a structural equation with unobserved heterogeneity by imposing constancy assumptions on the first and second derivatives. I consider a less restrictive model that imposes constancy assumptions on the second partial derivative of the structural equation. Assuming the existence of suitable instrumental variables, I provide identification results and show that the model can be estimated using a generalized control function approach. I consider an application to the estimation of the returns to education in Chile, exploiting variation across regions and cohorts in educational infrastructure and compulsory schooling laws. Using penalized spline functions to approximate the components of the average structural function, I find that the local average returns to schooling are highly nonlinear and typically underestimated by flexible models that ignore the endogeneity of schooling. I also find evidence of credential effects for high school and college graduates, and limited evidence of comparative advantage bias in the returns to certain levels of education.
dc.fuente.origenWOS
dc.identifier.doi10.3982/QE123
dc.identifier.eissn1759-7331
dc.identifier.issn1759-7323
dc.identifier.urihttps://doi.org/10.3982/QE123
dc.identifier.urihttps://repositorio.uc.cl/handle/11534/101793
dc.identifier.wosidWOS:000316854000004
dc.issue.numero1
dc.language.isoen
dc.pagina.final148
dc.pagina.inicio125
dc.revistaQuantitative economics
dc.rightsacceso restringido
dc.subjectNonparametric regression
dc.subjectendogenous regressors
dc.subjectcontrol function
dc.subjectendogenous treatment
dc.subjectreturns to schooling
dc.subject.ods03 Good Health and Well-being
dc.subject.odspa03 Salud y bienestar
dc.titleModeling structural equations with endogenous regressors and heterogeneity through derivative constraints
dc.typeartículo
dc.volumen4
sipa.indexWOS
sipa.trazabilidadWOS;2025-01-12
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