Kenneth I. Wolpin

On the Specification and Estimation of the Production Function for Cognitive Achievement

This paper considers methods for modelling the production function for cognitive achievement in a way that captures theoretical notions that child development is a cumulative process depending on the history of family and school inputs and on innate ability. It develops a general modelling framework that accommodates many of the estimating equations used in the literatures. It considers different ways of addressing data limitations, and it makes precise the identifying assumptions needed to justify alternative approaches. Commonly used specifications are shown to place restrictive assumptions on the production technology. Ways of testing modelling assumptions and of relaxing them are discussed.

The Career Decisions of Young Men

This paper provides structural estimates of a dynamic model of schooling, work, and occupational choice decisions based on 11 years of observations on a sample of young men from the 1979 youth cohort of the National Longitudinal Surveys of Labor Market Experience (NLSY). The structural estimation framework that we adopt fully imposes the restrictions of the theory and permits an investigation of whether such a theoretically restricted model can succeed in quantitatively fitting the observed data patterns. We find that a suitably extended human capital investment model can in fact do an excellent job of fitting observed data on school attendance, work, occupational choices, and wages in the NLSY data on young men and also produces reasonable forecasts of future work decisions and wage patterns.

Credit market constraints, consumption smoothing and the accumulation of durable production assets in low-income countries : investments in bullocks in India

In this paper we formulate and estimate a finite-horizon, structural dynamic model of agricultural investment behavior that incorporates the major features of low-income agricultural environments: income uncertainty, constraints on borrowing and rental markets, and the use of investment assets to generate income and smooth consumption. The model is fit to longitudinal Indian household data on farm profits, bullock stocks, and pump sets. The estimated structural parameters are used to assess the effects on the life cycle accumulation of bullocks, agricultural profits, and welfare associated with complete markets and bullock liquidity and with second-best policies that provide assured sources of income to farmers and weather insurance.

The Effect of Parental Transfers and Borrowing Constraints on Educational Attainment

A strong positive association between ones school attainment and that of ones parents has been consistently documented in numerous empirical studies. The underlying cause of this intergenerational correlation has been the subject of contentious debate in the social sciences for many years. Two competing types of explanations are prominent. The first is based on the heritability of traits, that is, that children of more educated parents may inherit the abilities, personalities and preferences that led to the higher educational achievement of their parents. The second type of explanation is based on human capital production, namely that more educated parents, due to their own preferences for more educated children and/or due to their higher wealth, may invest more heavily in their childrens human capital.

Testing the quantity-quality fertility model: the use of twins as a natural experiment.

The predictive content of the quantity-quality model of fertility and the empirical information required for verification under a minimal set of restrictions on the utility function is described. It is demonstrated that commodity-independent compensated price effects must be known to infer the existence of the unobservable interdependent shadow prices of the model with a relatively weak structure improsed on preference orderings. A method of using multiple birth events to substitute for these exogenous prices is proposed and applied to household data from India.

Why Youths Drop Out of High School: The Impact of Preferences, Opportunities, and Abilities

An oiler assembly is disclosed for feeding a relatively precise and consistent lubrication. The assembly includes a supply of the lubricant and a flow line placing the supply in communication with the lubrication point. A metering valve is interposed in the flow line and generally comprises a body having an inlet and an outlet. The body further includes a bore having one end thereof in communication with the inlet and the other end thereof in communication with the outlet. A porous rod is disposed in the bore of the body. A sealing member is disposed in the bore to preclude the passage of lubricant from the inlet end to the outlet end of the bore except by passage through said porous rod.

An Estimable Dynamic Stochastic Model of Fertility and Child Mortality

This paper develops a finite-horizon dynamic stochastic model of discrete choice with respect to life-cycle fertility within an environment where infant survival is uncertain. The model yields implications for the number, timing, and spacing of children. A tractable estimation method is developed for the linear constraint-quadratic utility case that is intimately tied to the dynamic optimization problem, and the method is applied to Malaysian household data. Estimation is based on integrating the numerical solution of the dynamic programming model of behavior with a maximum likelihood procedure.

Intersectoral Labor Mobility and the Growth of the Service Sector

One of the most striking changes in the U.S. economy over the past 50 years has been the growth in the service sector. In 1950, 57 percent of workers were employed in the service sector, by 1970 that figure had risen to 63 percent and by 2000 to 75 percent. While service sector employment grew by 2.2 percent per year faster than employment in the goods sector between 1968 and 2000, the real hourly wage in the service sector grew only by 0.23 percent more per year over the same period. In this paper, we assess whether or not the essential constancy of the relative wage implies that individuals face small costs of switching sectors and quantify the relative importance of labor supply and demand factors in the growth of the service sector. We specify and estimate a two-sector growth model with idiosyncratic and aggregate shocks that allows us to address these empirical issues in a unified coherent framework. Our estimates imply that there are large mobility costs; output in both sectors would have been double their current levels if these mobility costs had been zero. In addition, we find that demand side factors, that is, technical change and movements in product and capital prices, were responsible for the growth of the service sector.

The Specification and Estimation of Dynamic Stochastic Discrete Choice Models: A Survey

Our main goal is to quantify the returns to a career in the United States Congress. We specify a dynamic model of career decisions of a member of Congress and estimate this model using a newly collected dataset. Given estimates of the structural model, we ...

Dynamic Labour Force Participation of Married Women and Endogenous Work Experience

This paper presents and estimates a dynamic model of married womens labour force participation and fertility in which the effect of work experience on wages is explicitly taken into account. Because current participation alters future potential earnings, the investment return to work will be an important factor in the current work decision in any forward-looking behavioural model. The model is estimated using the National Longitudinal Surveys mature womens cohort. We use the estimates of our model to predict changes in the lifecycle patterns of employment due to changes in schooling, fertility, husbands income, and the magnitude of the experience effect on wages. We find that although work experience increases the disutility of further work, the effect is overwhelmed by the positive effect of experience on wages, leading to persistence in the employment patterns of these women. In addition we find that an increase in young children and in husbands income substantially reduces participation while increased schooling has a powerful positive impact on participation.