Dear all,
Has anyone written a code to adjust for measurement errors in categorical (or binary) regressors using instrumental variables, as suggested by Kane, Rouse and Staiger (1999), “Estimating returns to schooling when schooling is misreported”, NBER Working Paper 7235? They propose using GMM to identify measurement errors in self-reported educational attainment and to adjust the estimates of the return to schooling. This requires two categorical variables of educational attainment, with independent sources of reporting error.
Thanks,
Bjorn
Has anyone written a code to adjust for measurement errors in categorical (or binary) regressors using instrumental variables, as suggested by Kane, Rouse and Staiger (1999), “Estimating returns to schooling when schooling is misreported”, NBER Working Paper 7235? They propose using GMM to identify measurement errors in self-reported educational attainment and to adjust the estimates of the return to schooling. This requires two categorical variables of educational attainment, with independent sources of reporting error.
Thanks,
Bjorn
