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Estimation of Semiparametric Censored Regression Models: An Application to Changes in Black-White Earnings Inequality during the 1960s

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  • Kenneth Y. Chay
  • Bo E. Honoré

Abstract

Building on the work of Chay (1995), this study examines the impact of civil rights policies on black economic progress using individual-level panel data. Many earnings records are censored and the degree of censoring changed during the period of interest. Consequently, valid estimates of the program effects must account for this censoring. Maximum likelihood estimation can be used if the error terms of the model are identically normally distributed. We investigate the value of using weaker assumptions on the error process to estimate the laws impact. The analysis shows that there was significant black-white earnings convergence in the South during the 1960s. We also find that semiparametric estimation methods are informative in pinpointing which parts of the model are mis-specified.

Suggested Citation

  • Kenneth Y. Chay & Bo E. Honoré, 1998. "Estimation of Semiparametric Censored Regression Models: An Application to Changes in Black-White Earnings Inequality during the 1960s," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 4-38.
    • Handle: RePEc:uwp:jhriss:v:33:y:1998:i:1:p:4-38
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    Cited by:

    1. Mark Ottoni Wilhelm, 2008. "Practical Considerations for Choosing Between Tobit and SCLS or CLAD Estimators for Censored Regression Models with an Application to Charitable Giving," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(4), pages 559-582, August.
    2. Darren Lubotsky, 2007. "Chutes or Ladders? A Longitudinal Analysis of Immigrant Earnings," Journal of Political Economy, University of Chicago Press, vol. 115(5), pages 820-867, October.
    3. Khan, Shakeeb & Ponomareva, Maria & Tamer, Elie, 2016. "Identification of panel data models with endogenous censoring," Journal of Econometrics, Elsevier, vol. 194(1), pages 57-75.
    4. Daniel Pollmann & Thomas Dohmen & Franz Palm, 2020. "Robust Estimation of Wage Dispersion with Censored Data: An Application to Occupational Earnings Risk and Risk Attitudes," De Economist, Springer, vol. 168(4), pages 519-540, December.
    5. Richard J. Butler & Gene Lai, 2023. "Insurance wage-offer disparities by gender: random forest regression and quantile regression evidence from the 2010–2018 American Community Surveys," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 48(2), pages 192-229, September.
    6. Adolfo Meisel-Roca & María Teresa Ramírez-Giraldo & Daniel Lasso-Jaramillo, 2023. "Gender height dimorphism: An approximation of the living Standards in Colombia, 1920-1990," Investigaciones de Historia Económica - Economic History Research (IHE-EHR), Journal of the Spanish Economic History Association, Asociación Española de Historia Económica, vol. 19(02), pages 124-139.
    7. BISHOP, John A. & Liu, Haiyong & Meng, Qi, 2007. "Are Chinese smokers sensitive to price?," China Economic Review, Elsevier, vol. 18(2), pages 113-121.
    8. Daniel Pollmann & Thomas Dohmen & Franz Palm, 2020. "Dispersion estimation; Earnings risk; Censoring; Quantile regression; Occupational choice; Sorting; Risk preferences; SOEP; IABS," ECONtribute Discussion Papers Series 028, University of Bonn and University of Cologne, Germany.
    9. Feng Dong & Bolin Yu & Jixiong Zhang, 2018. "What Contributes to Regional Disparities of Energy Consumption in China? Evidence from Quantile Regression-Shapley Decomposition Approach," Sustainability, MDPI, vol. 10(6), pages 1-26, May.
    10. Robert ALEXANDER & Murat GENC & Mohammad JAFORULLAH, 2010. "Gender and Ethnicity in the New Zealand Labour Market," EcoMod2004 330600008, EcoMod.
    11. Youngki Shin & Zvezdomir Todorov, 2021. "Exact computation of maximum rank correlation estimator," The Econometrics Journal, Royal Economic Society, vol. 24(3), pages 589-607.
    12. Kenneth Y. Chay & Jonathan Guryan & Bhashkar Mazumder, 2014. "Early Life Environment and Racial Inequality in Education and Earnings in the United States," Working Paper Series WP-2014-28, Federal Reserve Bank of Chicago.
    13. Bilias, Yannis & Chen, Songnian & Ying, Zhiliang, 2000. "Simple resampling methods for censored regression quantiles," Journal of Econometrics, Elsevier, vol. 99(2), pages 373-386, December.
    14. Xin, Kai & Zhang, ZhengYu & Zhou, YaHong & Zhu, PingFang, 2021. "Time-varying individual effects in a panel data probit model with an application to female labor force participation," Economic Modelling, Elsevier, vol. 95(C), pages 181-191.
    15. Abrevaya, Jason, 1999. "Computation of the maximum rank correlation estimator," Economics Letters, Elsevier, vol. 62(3), pages 279-285, March.
    16. Wilhelm, Mark Ottoni & Brown, Eleanor & Rooney, Patrick M. & Steinberg, Richard, 2008. "The intergenerational transmission of generosity," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 2146-2156, October.
    17. repec:eee:labchp:v:3:y:1999:i:pc:p:3143-3259 is not listed on IDEAS

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