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Monotonicity and the Roy model

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  • Chevalier, Arnaud
  • Lanot, Gauthier

Abstract

In this note we study the implications on a bivariate normal Roy model of two sets of monotonicity hypotheses proposed recently by Manski and Pepper (Econometrica, Vol. 64 (2000), pp. 997–1011). In that simple context, we show that these hypotheses imply strong restrictions on the correlations structure between the decision and the rewards.
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  • Chevalier, Arnaud & Lanot, Gauthier, 2002. "Monotonicity and the Roy model," LSE Research Online Documents on Economics 19498, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:19498
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    References listed on IDEAS

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    1. Vijverberg, Wim P. M., 1993. "Measuring the unidentified parameter of the extended Roy model of selectivity," Journal of Econometrics, Elsevier, vol. 57(1-3), pages 69-89.
    2. Neumark, David, 1999. "Biases in twin estimates of the return to schooling," Economics of Education Review, Elsevier, vol. 18(2), pages 143-148, April.
    3. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863, Elsevier.
    4. Orley Ashenfelter & Colm Harmon & Hessel Oosterbeek, 1999. "A Review of Estimates of the Schooling/Earnings Relationship, with Tests for Publication Bias," Working Papers 804, Princeton University, Department of Economics, Industrial Relations Section..
    5. A. D. Roy, 1951. "Some Thoughts On The Distribution Of Earnings," Oxford Economic Papers, Oxford University Press, vol. 3(2), pages 135-146.
    6. Donna K. Ginther, 2000. "Alternative Estimates of the Effect of Schooling on Earnings," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 103-116, February.
    7. Joshua D. Angrist & Guido W. Imbens & D.B. Rubin, 1993. "Identification of Causal Effects Using Instrumental Variables," NBER Technical Working Papers 0136, National Bureau of Economic Research, Inc.
    8. Ashenfelter, Orley & Harmon, Colm & Oosterbeek, Hessel, 1999. "A review of estimates of the schooling/earnings relationship, with tests for publication bias," Labour Economics, Elsevier, vol. 6(4), pages 453-470, November.
    9. Manski, Charles F, 1990. "Nonparametric Bounds on Treatment Effects," American Economic Review, American Economic Association, vol. 80(2), pages 319-323, May.
    10. O. Ashenfelter & D. Card (ed.), 1999. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 3, number 3.
    11. Charles F. Manski & John V. Pepper, 2000. "Monotone Instrumental Variables, with an Application to the Returns to Schooling," Econometrica, Econometric Society, vol. 68(4), pages 997-1012, July.
    12. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January.
    13. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
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    Cited by:

    1. Michael Gerfin & Martin Schellhorn, 2006. "Nonparametric bounds on the effect of deductibles in health care insurance on doctor visits – Swiss evidence," Health Economics, John Wiley & Sons, Ltd., vol. 15(9), pages 1011-1020, September.

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