Download or read book Essays on Applied Semiparametric Econometrics written by Tomás Andrés Rau Binder and published by . This book was released on 2007 with total page 162 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of two essays. In the first essay I propose a new class of flexible microeconometric models that incorporates endogenous regressors and sorting. Existing models, including Garen's (1984) correlated random coefficients model, and Newey, Powell, and Vella's (1999) fully-flexible model with an additive error, can be derived from a structural equation with unobserved heterogeneity by imposing homogeneity and constancy assumptions on the first and second derivatives. I consider a less restrictive model that imposes homogeneity assumptions on the second partial derivative of the structural equation. Assuming the existence of suitable instrumental variables, the model can be estimated using a generalized control function approach. I consider an application to the estimation of the returns to education in Chile, exploiting variation across regions and cohorts in educational infrastructure and compulsory schooling laws. Using penalized spline functions to approximate the components of the average structural response function, I find that the local average returns to schooling are typically under-estimated by flexible models that ignore the endogeneity of schooling. I also find limited evidence of comparative advantage bias in the returns to certain levels of education.