Semiparametric distribution regression with instruments and monotonicity

Dominik Wied

Labour Economics, 2024, vol. 90, issue C

Abstract: This paper proposes IV-based estimators for the semiparametric distribution regression model in the presence of an endogenous regressor, which are based on an extension of IV probit estimators and the idea of control functions. We discuss the causal interpretation of the estimators and two methods (monotone rearrangement and isotonic regression) to ensure a monotonically increasing distribution function. Asymptotic properties and simulation evidence are provided. An application to income equations with German SOEP data reveals statistically significant and heterogeneous differences to the inconsistent non-IV-based estimator.

Keywords: Control function; Endogeneity; Isotonic regression; Mincer-type equations (search for similar items in EconPapers)
JEL-codes: C26 J30 (search for similar items in EconPapers)
Date: 2024
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Working Paper: Semiparametric Distribution Regression with Instruments and Monotonicity (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:90:y:2024:i:c:s0927537124000605

DOI: 10.1016/j.labeco.2024.102565

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