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Author: Taber, Christopher Robert

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1.	Cameron, Stephen V. Taber, Christopher Robert
1.	Estimation of Educational Borrowing Constraints Using Returns to Schooling Journal of Political Economy 112,1,Part_1 (February 2004): 132-182. Also: http://www.jstor.org/stable/10.1086/379937 Cohort(s): NLSY79 Publisher: University of Chicago Press Keyword(s): College Education; Education; Educational Costs; Educational Returns This paper measures the importance of borrowing constraints on education decisions. Empirical identification of borrowing constraints is secured by the economic prediction that opportunity costs and direct costs of schooling affect borrowing-constrained and unconstrained persons differently. Direct costs need to be financed during school and impose a larger burden on credit constrained students. By contrast, gross forgone earnings do not have to be financed. We explore the implications of this idea using four methodologies: schooling attainment models, instrumental variable wage regressions, and two structural economic models that integrate both schooling choices and schooling returns into a unified framework. None of the methods produces evidence that borrowing constraints generate inefficiencies in the market for schooling in the current policy environment. We conclude that, on the margin, additional policies aimed at improving credit access will have little impact on schooling attainment.
	Bibliography Citation Cameron, Stephen V. and Christopher Robert Taber. "Estimation of Educational Borrowing Constraints Using Returns to Schooling." Journal of Political Economy 112,1,Part_1 (February 2004): 132-182.

2.	Gladden, Tricia Lynn Taber, Christopher Robert
2.	The Relationship Between Wage Growth and Wage Levels JCPR Working Paper 173, Joint Center for Poverty Research, Northwestern University/University of Chicago, October 2000. Also: http://www.northwestern.edu/ipr/jcpr/workingpapers/wpfiles/TaberGladdenSG2000.pdf Cohort(s): NLSY79 Publisher: Joint Center for Poverty Research Keyword(s): Endogeneity; Heterogeneity; Job Training; Modeling, Fixed Effects; Panel Study of Income Dynamics (PSID); Skill Formation; Skilled Workers; Wage Growth; Wage Levels; Work Experience Permission to reprint the abstract has not been received from the publisher. In the last thirty years we have witnessed large increases in the "returns to skill." These changes in the wage structure have renewed interest in increasing the skill levels of low skill workers. Attempts to do this through job training programs have been largely unsuccessful as the wage gains from these programs tend to be quite modest. In rethinking questions about subsidizing skill formation it is useful to step back and explore the issue of wage growth among low skilled workers. Despite the large amount of work in labor economics devoted towards the wage process we know surprisingly little about the mechanics of wage growth, particularly among low skilled workers. This work furthers this knowledge by exploring the link between wage growth and wage levels building on our previous work. While many different policies to raise the wages of low wage workers have been proposed, the simplest and most common is increasing labor force attachment. One of the most robust findings in labor economics is that wages increase with work experience, however very little of this work has estimated the extent of this growth among low wage workers. In part, this hole in the literature may have arisen because there are serious econometric issues behind the wage growth process involving parameter heterogeneity, endogeneity, and selection issues. We are attempting this hole and address these issues. This work extends the literature on the covariance structure of wages by focusing on low skill workers using the National Longitudinal Survey of Youth and the Panel Study of Income Dynamics. Our previous work indicates that in examining wage growth among the poor, it is extremely important to include measures of actual experience. This is problematic in that labor market experience is likely to be endogenous and related to wage levels and wage growth. We have developed a framework that allows for these relationships. It incorporates individual "fixed effects" in both wage levels and wag e growth. We are estimating this model using Generalized Methods of Moments. Our results to date find little relationship between wage levels and log wage growth. After completing this, we will simulate the impact of labor force participation on future wages of low wage workers. Identification requires strong assumptions about the error structure. While we cannot completely avoid these type of assumptions, we will test the robustness of the results using a wide range of alternatives.
	Bibliography Citation Gladden, Tricia Lynn and Christopher Robert Taber. "The Relationship Between Wage Growth and Wage Levels." JCPR Working Paper 173, Joint Center for Poverty Research, Northwestern University/University of Chicago, October 2000.

3.	Gladden, Tricia Lynn Taber, Christopher Robert
3.	The Relationship Between Wage Growth and Wage Levels Journal of Applied Econometrics 24,6 (September-October 2009): 914-932. Also: http://onlinelibrary.wiley.com/doi/10.1002/jae.1072/full Cohort(s): NLSY79 Publisher: Wiley Online Keyword(s): Wage Growth; Wage Levels; Wages; Work Experience Permission to reprint the abstract has not been received from the publisher. We estimate the covariance between the permanent component of wages and a random coefficient on experience in models both with potential experience and with actual experience. Actual experience is allowed to be arbitrarily correlated with both the permanent component of wages and the random component on experience. We find no evidence that workers of higher ability experience faster wage growth. Our point estimates suggest that a worker with a one standard deviation higher level of permanent ability would have a return to annual potential experience that is 0.61 of a percentage point lower. The analogous point estimate for actual experience is 0.87 of a point lower. Contrary to the popular perception, wage growth among low-skill workers appears to be at least as high as that for a medium-skilled worker. Copyright © 2009 John Wiley & Sons, Ltd.
	Bibliography Citation Gladden, Tricia Lynn and Christopher Robert Taber. "The Relationship Between Wage Growth and Wage Levels." Journal of Applied Econometrics 24,6 (September-October 2009): 914-932.

4.	Heckman, James J. Lochner, Lance John Taber, Christopher Robert
4.	Explaining Rising Wage Inequality: Explorations with a Dynamic General Equilibrium Model of Labor Earnings with Heterogeneous Agents NBER Working Paper No. 6384, National Bureau of Economic Research, January 1998. Also: http://www.nber.org/cgi-bin/wpsearch.pl?action=bibliography&paper=W6384&year=98 Cohort(s): NLSY79 Publisher: National Bureau of Economic Research (NBER) Keyword(s): Armed Forces Qualifications Test (AFQT); College Enrollment; College Graduates; Earnings; Human Capital; Modeling; Schooling; Skill Formation; Skills; Training, On-the-Job; Training, Post-School; Transition, School to Work; Wage Differentials; Wage Equations This paper develops and estimates an overlapping generations general equilibrium model of labor earnings, skill formation and physical capital accumulation with heterogeneous human capital. The model analyzes both schooling choices and post-school on-the-job investment in skills in a framework in which different schooling levels index different skills. A key insight in the model is that accounting for the distinction between skill prices and measured wages is important for analyzing the changing wage structure, as they often move in different directions. New methods are developed and applied to estimate the demand for unobserved human capital and to determine the substitution relationships in aggregate technology among skills and capital. We estimate skill-specific human capital accumulation equations that are consistent with the general equilibrium predictions of the model. Using our estimates, we find that a model of skill-biased technical change with a trend estimated from our aggregate technology is consistent with the central feature of rising wage equality measured by the college-high school wage differential and by the standard deviation of log earnings over the past 15 years. Immigration of low skill workers contributes little to rising wage inequality. When the model is extended to account for the enlarged cohorts of the Baby Boom, we find that the same parameter estimates of the supply functions for human capital that are used the explain the wage history of the last 15 years also explain the last 35 years of wage inequality as documented by Katz and Murphy (1992).
	Bibliography Citation Heckman, James J., Lance John Lochner and Christopher Robert Taber. "Explaining Rising Wage Inequality: Explorations with a Dynamic General Equilibrium Model of Labor Earnings with Heterogeneous Agents." NBER Working Paper No. 6384, National Bureau of Economic Research, January 1998.

5.	Heckman, James J. Lochner, Lance John Taber, Christopher Robert
5.	General Equilibrium Cost Benefit Analysis of Education and Tax Policies NBER Working Paper No. 6881, National Bureau of Economic Research, January 1999. Also: http://nber.nber.org/papers/W6881 Cohort(s): NLSY79 Publisher: National Bureau of Economic Research (NBER) Keyword(s): Cost-Benefit Studies; Endogeneity; Heterogeneity; Human Capital; Modeling; Schooling; Skill Formation; Taxes; Training, On-the-Job; Tuition This paper formulates and estimates an open-economy overlapping generation general-equilibrium model of endogenous heterogeneous human capital in the form of schooling and on-the-job training. Physical capital accumulation is also analyzed. We use the model to explain rising wage inequality in the past two decades due to skill-biased technical change and to estimate investment responses. We compare an open economy version with a closed economy version. Using our empirically grounded general equilibrium model that explains rising wage inequality, we evaluate two policies often suggested as solutions to the problem of rising wage inequality: (a) tuition subsidies to promote skill formation and (b) tax policies. We establish that conventional partial equilibrium policy evaluation methods widely used in labor economics and public finance give substantially misleading estimates of the impact of national tax and tuition policies on skill formation. Conventional microeconomic methods for estimating the schooling response to tuition overestimate the response by an order of magnitude. Simulations of our model also reveal that move to a flat consumption tax raises capital accumulation and the real wages of all skill groups and barely affects overall measures of income inequality.
	Bibliography Citation Heckman, James J., Lance John Lochner and Christopher Robert Taber. "General Equilibrium Cost Benefit Analysis of Education and Tax Policies." NBER Working Paper No. 6881, National Bureau of Economic Research, January 1999.

6.	Taber, Christopher Robert
6.	Three Essays on Semiparametric Models of Dynamic Discrete Choice, Program Evaluation, and the College Premium in the Eighties Ph.D. Dissertation, The University of Chicago, 1995 Cohort(s): NLSY79 Publisher: UMI - University Microfilms, Bell and Howell Information and Learning Keyword(s): Armed Forces Qualifications Test (AFQT); College Education; Earnings; Endogeneity; Heterogeneity; High School Completion/Graduates; High School Dropouts; Modeling; Schooling; Skills; Wage Gap The first chapter takes the first step towards semiparametric estimation of discrete choice dynamic programming models by establishing sufficient conditions for their identification. I develop a specification in which the distribution of the error terms is unrestricted. In addition I allow the agents' information sets to be heterogeneous where this private information may covary with the error terms in a very general way. I treat both a discrete choice version of the model and a semiparametric tobit version in which there exist endogenous random variables which are only observed conditional on the choices made. I show that the parameters in my model are identified with essentially no restrictions on the distribution of the error terms and on the information structure except that they are independent of the regressors. I also show that additional restrictions are necessary to assure identification of the full model and I provide two sets of conditions that suffice. The second chapter applies this model to schooling decision. Its goal is to distinguish whether the rising wage gap between college educated workers and other high school graduates during the nineteen eighties results primarily from an increase in the value of skills learned in college or from an increase in the value of skills typically possessed by college students prior to entering college (i.e. ability). I attempt to make this distinction in two ways. As a preliminary exercise, I use Armed Forces Qualifying Test (AFQT) scores in the National Longitudinal Survey of Youth (NLSY) to proxy for ability and examine how controlling for observed ability influences the trend in the college premium. Secondly, I control for unobserved ability by specifying a structural discrete choice dynamic programming model in which a student who is deciding whether to drop out of high school takes into account both the direct value of graduating high school and the value of the option to att end college. I estimate the model both fully parametrically and semiparametrically using nonparametric maximum likelihood. The econometric specification provides an interpretable framework for distinguishing between the two alternative hypotheses. The methodology uses only one step which improves efficiency by incorporating all of the information available from the longitudinal data. I summarize these results by documenting the change in the expected gain in earnings from attending college for those individuals who are indifferent about attending college. I find that including AFQT scores in the regressions has no influence on the rise in the college premium. However, controlling for unobserved ability eliminates it. The third chapter is written jointly with James Heckman and Jeffery Smith. It considers the evaluation of social programs using experimental data in the presence of dropouts. We begin with a popular estimator that produces estimates of the mean impact of treatment on the treated in experiments with dropouts. In experiments in which the dropouts receive none of the treatment prior to dropping out, this estimator should work very well. However, in cases where the dropouts may have received some of the treatment prior to leaving the experiment, the estimator may not work well. This paper addresses this concern and the issues it raises. We motivate the discussion with the recent experimental evaluation of the JTPA program which used this estimator even though most of the dropouts received some training prior to dropping out. (Abstract shortened by UMI.)
	Bibliography Citation Taber, Christopher Robert. Three Essays on Semiparametric Models of Dynamic Discrete Choice, Program Evaluation, and the College Premium in the Eighties. Ph.D. Dissertation, The University of Chicago, 1995.

7.	Taber, Christopher Robert Roys, Nicolas A.
7.	Skill Prices, Occupations, and Changes in the Wage Structure for Low Skilled Men NBER Working Paper No. 26453, National Bureau of Economic Research, November 2019. Also: https://www.nber.org/papers/w26453 Cohort(s): NLSY79, NLSY97 Publisher: National Bureau of Economic Research (NBER) Keyword(s): Male Sample; Occupational Choice; Occupational Information Network (ONET); Skills; Wage Levels This paper studies the effect of the change in occupational structure on wages for low skilled men. We develop a model of occupational choice in which workers have multi-dimensional skills that are exploited differently across different occupations. We allow for a rich specification of technological change which has heterogenous effects on different occupations and different parts of the skill distribution. We estimate the model combining four datasets: (1) ONET, to measure skill intensity across occupations, (2) NLSY79, to identify life-cycle supply effects, (3) CPS (ORG), to estimate the evolution of skill prices and occupations over time, and (4) NLSY97 to see how the gain to specific skills has changed. We find that while changes in the occupational structure have affected wages of low skilled workers, the effect is not dramatic. First, the wages in traditional blue collar occupations have not fallen substantially relative to other occupations--a fact that we can not reconcile with a competitive model. Second, our decompositions show that changes in occupations explain only a small part of the patterns in wage levels over our time period. Price changes within occupation are far more important. Third, while we see an increase in the payoff to interpersonal skills, manual skills still remain the most important skill type for low educated males.
	Bibliography Citation Taber, Christopher Robert and Nicolas A. Roys. "Skill Prices, Occupations, and Changes in the Wage Structure for Low Skilled Men." NBER Working Paper No. 26453, National Bureau of Economic Research, November 2019.

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