Quantile regression coefficients, Econometrics

Assignment Help:

Consider the study of the effect of public-sponsored training programs. As argued in public programs of training and employment are designed to improve participant's productive skills, which in turn would affect their earnings and dependency on social welfare benefits.

We use the Job Training Partnership Act (JTPA), a public training program that has been extensively studied in the literature. For example, see The JTPA was a large publicly-funded training program in the United States that began funding in October 1983 and continued until late 1990's. We focus on the Title II subprogram, which was offered only to individuals with \barriers to employment" (long-term use of welfare, being a high-school drop-out, 15 or more recent weeks of unemployment, limited English proficiency, phsysical or mental disability, reading proficiency below 7th grade level or an arrest record). Individuals in the randomly assigned JTPA treatment group were offered training, while those in the control group were excluded for a period of 18 months.

Our interest lies in measuring the effect of training on participants' future earnings.

We use the database in ? that contains information about adult male and female JTPA participants and non-participants.

It has the following variables:

_ earnings: 30 months accumulated earnings

_ jtpa offer: JTPA offer: dummy variable for individuals that recived a JTPA offer;

_ jtpa training: JTPA training: dummy variable for individuals that took JTPA training;

_ sex: male dummy variable;

_ hsorged: dummy variable for individuals with completed high school or GSE;

_ black: race dummy variable;

_ hispanic: dummy variable for hispanic;

_ married: dummy variable for married individuals;

_ wkless13: dummy variable for individuals working less than 13 weeks in the past year;

_ age2225,age2629,age3035,age3644 and age4554: age range indicator variables.

Question 1.a The government is interested in whether JTPA training had an effect on future earnings after controlling for the effect of age, marital status, gender, race and education. Using OLS estimate this effect and comment on its sign, magnitude and statistical significance. Repeat the analysis for those with positive earnings only. Are there differences between these two estimations? Why? Also compute the same estimates in log earnings and comment.

Question 1.b The government is interested in knowing if training has a different effect on men than in women. Can you test for that using the first OLS model in

Q 1.a (in levels, including 0 earnings, controlling for covariates)?

Question 1.c Using the first model in Q 1.a., analyze if there are differences across the effect of training on wages on different quintiles of the distribution.

Comment on its differences using quantile regression models. Present a graph for

f0:1; 0:2; 0:3; 0:4; 0:5; 0:6; 0:7; 0:8; 0:9g containing the quantile regression coefficients of the effect of training on wages, together with its 95% con_dence interval.

Question 1.d Provide an elaborated argument to justify that the estimators of the effect of training in Q 1.a may be upward biased.

Question 1.e Use an instrumental variables strategy to find a consistent estimator of the effect of training on wages. You should argue that jtpa offer serves as a good instrument for jtpa training. Explain very carefully.


Related Discussions:- Quantile regression coefficients

Regression Analysis, #qu3. People educational achievement is affected, amon...

#qu3. People educational achievement is affected, among other factors, by the demographic characteristics of their households; the following multiple regression model was estimated

Ramdom variable, let y denote the number of "heads" that occur when two coi...

let y denote the number of "heads" that occur when two coins are tossed

Standard deviation of the damage, In a year, weather can impose storm damag...

In a year, weather can impose storm damage to a home. From year to year the damage is random. Let Y be the dollar value of damage in a given year. Assume that 95% of the year's Y=$

Explain the term volatility clustering, Problem: (a) Write down the equ...

Problem: (a) Write down the equation for symmetric GARCH and clearly explain its components. (b) Explain the term ‘volatility clustering'. (c) How would you model leverag

Determine the interest rate, Assume that Jane spends her entire income of $...

Assume that Jane spends her entire income of $100 on two goods,  x  and  y.  Moreover, these goods are perfect complements for her.  Let the price of good  x  go up while the price

Maximising levels of capital, A perfectly competitive firm hires its machin...

A perfectly competitive firm hires its machines at a constant rental rate of r = 5 euros per unit and its workers at a constant wage rate of w = 4 euros per unit. It can also sell

Pricing, what is the importance of price

what is the importance of price

Fnd the optimal hedge ratio, Hedging ?nancial risk is a very important prac...

Hedging ?nancial risk is a very important practical issue in economics.  In this exercise, you will derive your optimal hedge ratio, assuming that you are an expected utility maxim

Multicollinearity, if there is multicollinearity so why we can not estimate...

if there is multicollinearity so why we can not estimate the value of parameters?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd