ECON 151 Lecture Notes - Lecture 16: Job Satisfaction, Reduced Form, Externality
11 Nov 2020
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Document Summary
First stage estimation: sit = 0 + 1it q1i + it. Reduced form : ln(w) it = 0 + 1it q1ti + it. Wald estimator is the iv estimator for binary variable cases with q1 a dummy(binary. 0/1) variable indicating whether the child i is born on the first quarter of the year. Fd/ fe estimates give similar results but on a restricted sample of twin slightly lower. Iv usually gives around same as ols. Very probable that ols is a low bound to real returns which is around the 10% level . Thus far, we only consider economic return: 6-12 % increase in annual wage; Evidence highlights other correlations: with health, criminality, social life, education of children, couple market, job satisfaction Utility return not necessary measurable in monetary terms. Thus far returns supposed to be individual; Yet, evidence shows that education is likely to produce externality. Education is a public good with social returns .
