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    Recitations

    The following recitation notes are courtesy of Konrad Menzel and used with permission.

    REC # TOPICS CONTENTS
    I. Labor Market Statistics: Data Sources and Historical Overview
    II. The Neoclassical Labor Supply Model
    1 Measurement Error (PDF)

    Deriving the Slutsky Equation

    Using Roy's Identity

    Measurement Error

    Notation

    Classical Measurement Error

    Group Means as Proxy Variables

    Classical Measurement Error in Panel Data

    Cures for Classical Measurement Error

    "Non-Classical" Measurement Error
    2 Maximum Likelihood (PDF)

    Maximum Likelihood Estimation (MLE)

    MLE Examples

    Bernoulli Distribution

    Normal Linear Regression

    The Probit Model
    3 Panel Data (PDF)

    Estimation With Panel Data

    Basic Setup

    First Differences

    Fixed Effects

    Random Effects

    Measurement Issues

    Non-Classical EIV: Division Bias

    Classical Measurement Error in Panel Data

    One Solution to EIV: Wald IV
    III. Labor Demand, Immigration, Minimum Wages, and Unions
    4 Instrumental Variables (PDF)

    Grouped Data and Instrumental Variables

    How Does OLS Work?

    Group Means as Proxy Variables

    Main Types of Bias in OLS

    Grouped-Data IV

    Two-Stage Least Squares (2SLS)

    2SLS as a Grouped Data IV

    Potential Problems: Weak Instruments, Many Instruments

    Discussion of the Replication of Angrist

    OLS Regressions

    Fixed-Effects Regressions

    2SLS Estimates

    The Card Critique
    5 Instrumental Variables (cont.) (PDF)

    Instrumental Variables (continued)

    Omitted Variables and the Wald Estimator

    2SLS as a Grouped Data IV

    Heterogeneous Treatment Effects

    A Few Hints About Calculations With Scalars in Stata
    6 Random Coefficient Models (PDF)

    Random Coefficient Models

    Motivation

    Heterogeneous Treatment Effects

    Example: General Exam 2003, Question 1
    IV. Human Capital, Education, and Training
    7 Educational Choice (PDF)

    Educational Choice

    The Discount Rate Bias Story

    A Simple Model for Signaling

    Bayesian Perfect Equilibrium in Signaling Games

    Separating Equilibrium

    Pooling Equilibrium
    8 Bargaining and Hold-Up (PDF)

    Motivation

    Bargaining

    The Strategic Approach

    The Axiomatic Approach

    Interlude: Efficient Bargaining With Inefficient Outcomes?

    The Hold-Up Problem - Investment in Physical Capital
    V. Labor Demand and Related Topics
    9 Labor Demand (PDF)

    Market Power and "Classical" Labor Demand

    Estimating Market Power

    The Conduct Parameter

    The Corts Critique
    VI. Turnover, Matching, Learning, and the Returns to Tenure
    10 Normal Learning Model (PDF)

    Statistical Learning

    The Normal Learning Model

    The Jovanovic Example

    The Holmström (1982) Career Concerns Model
    11 Models of Turnover (PDF)

    Models of Turnover and Their Empirical Predictions

    Motivation

    Matching and On-The-Job Search - Deconstructing Jovanovic II

    Dynamic Decisions, Convexity, and Option Values

    Option Values in Continuous Time