Browsing by Author "Gayle, G. - L."

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    ArticlePublicationOpen Access
    Estimation of dynastic lifecycle discrete choice models
    (Wiley, 2018-11) Gayle, G. - L.; Golan, L.; Soytaş, Mehmet Ali; Economics; SOYTAŞ, Mehmet Ali
    This paper explores the estimation of a class of life‐cycle discrete choice dynastic models. It provides a new representation of the value function for these class of models. It compare a multistage conditional choice probability (CCP) estimator based on the new value function representation with a modified version of the full solution maximum likelihood estimator (MLE) in a Monte Carlo study. The modified CCP estimator performs comparably to the MLE in a finite sample but greatly reduces the computational cost. Using the proposed estimator, we estimate a dynastic model and use the estimated model to conduct counterfactual simulations to investigate the role Nature versus Nurture in intergenerational mobility. We find that Nature accounts for 20 percent of the observed intergenerational immobility at the bottom of income distribution. That means that 80 percent of mobility at the bottom of the income distribution is explained by economic decision and economic/institutional constraints.
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    ArticlePublicationOpen Access
    Intergenerational mobility and the effects of parental education, time investment, and income on children’s educational attainment
    (Federal Reserve Bank of St.Louis, 2018-07-15) Gayle, G. - L.; Golan, L.; Soytaş, Mehmet Ali; Economics; SOYTAŞ, Mehmet Ali
    This article analyzes the mechanisms through which parents’ and children’s education are linked. It estimates the causal effect of parental education, parental time with children, and parental income during early childhood on the educational outcomes of children. Estimating the causal effects of time with children, income, and parental education is challenging because parental time with children is usually unavailable in many datasets and because of the problem of endogeneity of parental income, time with children, and education. The authors, therefore, use an instrumental variables approach to estimate the causal effects. They find that once they account for the parental time input with children, parental income during the first five years is no longer statistically significant. The parental time investments of both parents in early childhood are each statistically and quantitatively significant determinants of the educational outcomes of children.