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Title: Over-Identification Tests in Earnings Functions with Fixed Effects
Resulting in 1 citation.
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Angrist, Joshua D. Newey, Whitney K. |
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Over-Identification Tests in Earnings Functions with Fixed Effects Journal of Business and Economic Statistics 9,3 (July 1991): 317-323. Also: http://www.jstor.org/stable/1391296 Cohort(s): NLSY79 Publisher: American Statistical Association Keyword(s): Earnings; Education; Educational Attainment; Educational Returns; Modeling, Fixed Effects; Research Methodology; Unions; Wages The fixed-effects model for panel data imposes restrictions on coefficients from regressions of all leads and lags of the dependent variable on all leads and lags of right-side variables. In the standard fixed-effects model, the omnibus goodness-of-fit statistic is shown to simplify to the degree of freedom times the R square from a regression analysis of covariance residuals on all leads and lags on the right-side variables. This result is applied to test models for the union-wage effect using data from the NLSY. Although schooling is often treated as time-invariant, schooling increases over a 5-year period for nearly 20 percent of continuously employed men in the NLSY. The analysis of covariance estimate of the returns to schooling is precisely estimated and roughly twice as large as the ordinary least squares estimate. In contrast to the union-wage-effects equation, the omnibus goodness-of-fit tests suggest that the fixed-effects assumption may be inappropriate for human capital earnings functions. [ABI/INFORM] |
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Bibliography Citation
Angrist, Joshua D. and Whitney K. Newey. "Over-Identification Tests in Earnings Functions with Fixed Effects." Journal of Business and Economic Statistics 9,3 (July 1991): 317-323.
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