Estimating Distributions of Counterfactuals with an Application ... - UCL

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388 CARNEIRO, HANSEN, AND HECKMAN TABLE 2b DESCRIPTIVE STATISTICS—PRESENT VALUE OF LOG EARNINGS (DISCOUNT RATE = 3%, NLSY 79—WHITE MALES) Overall High School College Variables Obs Mean Std. Dev. Min Max Obs Mean Std. Dev. Min Max Obs Mean Std. Dev. Min Max Present value 1161 956.13 730.87 18.12 7861.67 704 694.56 321.93 18.12 1885.85 457 1359.07 964.47 77.02 7861.67 of earnings (working life) ∗ Present value 1161 157.25 72.02 3.91 509.21 704 162.46 74.66 3.91 457.00 457 149.22 67.04 13.55 509.21 of earnings in Period 1 ∗ Present value 1161 798.88 694.55 14.21 7533.31 704 532.10 251.57 14.21 1582.89 457 1209.84 922.21 63.48 7533.31 of earnings in Period 2 ∗ NOTE: ∗ Earnings in thousands of dollars. Working life = From age 19–65. Period 1 = From age 19 to 29, inclusive. Period 2 = From age 30 to 65.
EFFECTS OF UNCERTAINTY ON COLLEGE CHOICE 389 TABLE 2c COVARIATES INCLUDED IN OUTCOME, COST AND TEST EQUATIONS Cost of Schooling Tuition and Foregone Psychic Earnings Earnings Cost Test Scores Intercept Yes Yes Yes Yes Urban Yes Yes Yes Yes South Yes Yes Yes Yes Cohort dummies Yes Yes Yes – Mean local unemployment rate Yes Yes – – Average local wage Yes Yes – – Local tution – Yes – – Number of siblings – – Yes Yes Mother’s education – – Yes Yes Father’s education – – Yes Yes Broken family – – Yes Enrolled in school at test date – – Yes Age in 1980 – – Yes utility) in the first period (ages 19–29 years) and in the second period (ages 30 to 65 years). Let V 1,s be the period 1 gross utility of achieving schooling level s, and V 2,s be the period 2 gross utility of obtaining schooling level s. Using (23), we write the gross utilities as V 1,s = ¯δ 1,s + X ′ ¯β 1,s + ᾱ ′ 1,s θ + ¯ε 1,s V 2,s = ¯δ 2,s + X ′ ¯β 2,s + ᾱ ′ 2,s θ + ¯ε 2,s These are the outcome equations for the model that we estimate. To see this, notice that V 1,s = = = ∑A 1 a=19 ∑A 1 a=19 ∑A 1 a=19 + ln Y a,s (1 + ρ) a δ a,s + X ′ β a,s + α ′ a,s θ + ε a,s + η 1,s × experience a + η 2,s × experience 2 a (1 + ρ) a δ a,s + X ′ β a,s + η 1,s × experience a + η 2,s × experience 2 a (1 + ρ) a [ A1 ∑ a=19 ] α a,s ′ (1 + ρ) a θ + ∑A 1 a=19 = ¯δ 1,s + X ′ ¯β 1,s + ᾱ ′ 1,s θ + ¯ε 1,s ε a,s (1 + ρ) a
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Estimating Distributions of Counterfactuals with an Application ... - UCL

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