Tuesday, 26 April 2016

Does Marriage Boost Men’s Wages?: Identification of Treatment Effects in Fixed Effects Regression Models for Panel Data

Presentation by Michael E. Sobel (Columbia University) jointly organized by USP and CO:STA

Social scientists have generated a large and inconclusive literature on the effect(s) of marriage on men’s wages. Researchers have hypothesized that the wage premium enjoyed by married men may reflect both a tendency for more productive men to marry and an effect of marriage on productivity. To sort out these explanations, researchers have used fixed effects regression models for panel data. This article shows that these models are generally inappropriate for answering the causal questions of interest. This talk clarifies estimands and identification conditions to help researchers use appropriate methods to model their data. It shows that even under benign conditions, a number of interesting and important treatment effects typically remain unidentified.