We develop and solve analytically an investment model with fixed adjust-ment costs and complete irreversibility that reproduces observed investment dynamics at the micro-level. We impose a minimal set of restrictions on technology and uncertainty. Most of the results duplicate or generalize...

In France, firms with 50 employees or more face substantially more regulation than firms with less than 50. As a result, the size distribution of firms is visibly distorted: there are many firms with exactly 49 employees. We model the regulation as the combination of a sunk cost that must be...

In France, firms that have 50 employees or more face substantially more regulation than firms that have less than 50. As a result, the size distribution of firms is visibly distorted: there are many firms with exactly 49 employees. We model the regulation as the combination of a sunk cost that...

The goal of this paper is to use a semiparametric reduced form model to estimate the effects of various tuition subsidies. This approach expands on the tuition subsidy example in Ichimura and Taber (2000) in a number of dimensions. It has become common practice in the empirical literature to...

This paper expands on Gibbons and Katz (1991) by looking at how the difference in wage losses across plant closing and layoff varies with race and gender. We find that the differences between white males and the other groups are striking and complex. The lemons effect of layoff holds for white...

In this paper, we investigate the responsiveness of the demand for college to changes in student aid arising from a Danish reform. We separately identify the effect of aid from that of other observed and unobserved variables such as parental income. We exploit the combination of a kinked aid...

In a seminal paper Gibbons and Katz (1991; GK) develop and empirically test an asymmetric information model of the labor market. The model predicts that wage losses following displacement should be larger for layouts than for plant closings, which was borne out by data from the Displaced Workers...

This chapter discusses identification of common selection models of the labor market. We start with the classic Roy model and show how it can be identified with exclusion restrictions. We then extend the argument to the generalized Roy model, treatment effect models, duration models, search...

This paper has two main parts. In the first, we describe a method that smooths the objective function in a general class of indirect inference models. Our smoothing procedure makes use of importance sampling weights in estimation of the auxiliary model on simulated data. The importance sampling...