This paper introduces a new and simple decomposition method for a binary choice model that is equivalent to the Blinder-Oaxaca decomposition analysis for wage differentials. The decomposition method is first developed for a single probit model and later generalized to a simultaneous equations...

The major contribution of this paper is ending a new and flexible way to measure the effects of selection on log-wages. In this context, we offer a general approach to performing decomposition analysis when selection effects are present. We call the difference between unconditional and...

Gender wage differentials, conditional on observed productivity characteristics, have been considered a possible indication of prejudice against women in the labor market. However, there is no conclusive evidence on whether these differentials are due to labor market discrimination or to...

We address the long standing question of whether production factors are paid their marginal products. We propose a new approach that circumvents the need to specify production functions and to compare marginal products to factor payments. Our approach is based on a simple equation that directly...

Heterogeneous firms are at the heart of both the New New International Trade Theory and the Micro-econometrics of International Firm Activities. One important aim of micro-econometric studies is to uncover stylized facts that hold over space and time, and that can both inspire theoretical models...

This paper describes a semiparametric Bayesian method for analyzing duration data. The proposed estimator specifies a complete functional form for duration spells, but allows flexibility by introducing an individual heterogeneity term, which follows a Dirichlet mixture distribution. I show how...

In this paper we reevaluate the returns to education based on the increase in the compulsory schooling age from 14 to 15 in the UK in 1947. We provide a Bayesian fuzzy regression discontinuity approach to infer the effect on earnings for a subset of subjects who turned 14 in a narrow window...