Normalizations and Misspecification in Skill Formation Models.
An important class of structural models studies the determinants of skill formation and the optimal timing of interventions. In this article, I provide new identification results for these models and investigate the effects of seemingly innocuous scale and location restrictions on parameters of inte...
| Publicado en: | Review of Economic Studies Vol. 93; no. 4; pp. 2574 - 2605 |
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| Formato: | Artículo |
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Oxford University Press / USA
Jul2026
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=195161445&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 195161445 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00346527 REM jtl: Review of Economic Studies issn: 00346527 maglogo: N pubinfo: dt: Jul2026 vid: 93 iid: 4 pid: 622 pub: Oxford University Press / USA artinfo: ui: 195161445 10.1093/restud/rdaf078 ppf: 2574 ppct: 31 formats: tig: atl: Normalizations and Misspecification in Skill Formation Models. aug: au: Freyberger, Joachim affil: University of Bonn, Germany su: Economic models Learning Production functions (Economic theory) Parameter estimation sug: subj: Economic models Learning Production functions (Economic theory) Parameter estimation keyword: copyrightHolder:Review of Economic Studies Ltd copyrightYear:2026 Factor models Identification inLanguage:en Measurement error Misspecification Normalizations publisher:Oxford University Press sameAs:https://dx.doi.org/10.1093/restud/rdaf078 Skill formation copyrightHolder:Review of Economic Studies Ltd copyrightYear:2026 Factor models Identification inLanguage:en Measurement error Misspecification Normalizations publisher:Oxford University Press sameAs:https://dx.doi.org/10.1093/restud/rdaf078 Skill formation ab: An important class of structural models studies the determinants of skill formation and the optimal timing of interventions. In this article, I provide new identification results for these models and investigate the effects of seemingly innocuous scale and location restrictions on parameters of interest. To do so, I first characterize the identified set of all parameters without these additional restrictions and show that important policy-relevant parameters are point identified under weaker assumptions than commonly used in the literature. The implications of imposing standard scale and location restrictions depend on how the model is specified, but they generally impact the interpretation of parameters and may affect counterfactuals. Importantly, with the popular constant elasticity of substitution (CES) production function, commonly used scale restrictions fix identified parameters and lead to misspecification. Consequently, simply changing the units of measurements of observed variables might yield ineffective investment strategies and misleading policy recommendations. I show how existing estimators can easily be adapted to solve these issues. As a byproduct, this article also presents a general and formal definition of when restrictions are truly normalizations. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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