Parameterization#
The following table keeps track of the parameterization for the computational implementation introduced in Computational Implementation
The wildcard {civilian} means either “blue” or “white”.
Parameter |
State variable in respy |
Explanation |
|---|---|---|
\(\delta\) |
delta |
discount factor |
\(e_{1,a}\) |
type_1 |
deviation for type 1 from type 0 in a |
\(e_{2,a}\) |
type_2 |
deviation for type 2 from type 0 in a |
\(e_{3,a}\) |
type_3 |
deviation for type 3 from type 0 in a |
Common parameters |
||
\(\alpha_a\) |
constant |
log of rental price if the base skill endowment of type 0 is normalized to 0 (wage) |
\(\vartheta_1\) |
common_hs_graduate |
common return to high school degree (non pecuniary) |
\(\vartheta_2\) |
common_co_graduate |
common return to college degree (non pecuniary) |
\(\vartheta_3\) |
common_hs_graduate |
effect of leaving the military early (after one year) |
Schooling-related |
||
\(\beta_{a,1}\) |
exp_school |
linear return to an additional year of schooling (wage) |
\(\beta_{a,2}\) |
exp_school |
skill premium of having finished high school (wage) |
\(\beta_{a,3}\) |
exp_school |
skill premium of having finished college (wage) |
\(\beta_{tc_1}\) |
hs_graduate |
net tuition costs college (non pecuniary) |
\(\beta_{tc_2}\) |
co_graduate |
additional tuition costs graduate school (non pecuniary) |
\(\beta_{rc_1}\) |
returns_to_high_school |
reward for going back to high school |
\(\beta_{rc_2}\) |
returns_to_college |
reward for going back to college |
Experience-related |
||
\(\gamma_{a,1}\) |
exp_{civilian}_collar |
return to experience, same sector, linear (wage) |
\(\gamma_{a,2}\) |
exp_{civilian}_collar_square |
return to experience, same sector, quadratic (divided by 100) (wage) |
\(\gamma_{a,3}\) |
any_exp_{civilian}_collar |
return for any experience in same sector |
\(\gamma_{a,4}\) |
period |
linear age effect (wage) |
\(\gamma_{a,5}\) |
is_minor |
effect of being a minor (wage) |
\(\gamma_{a,6}\) |
work_{civilian}_collar_lagged |
effect of being a minor (wage) |
\(\gamma_{a,7}\) |
exp_{civilian}_collar |
return to experience, other civilian sector, linear (wage) |
\(\gamma_{3,1}\) |
exp_military |
return to experience, same sector, linear (wage) |
\(\gamma_{3,2}\) |
exp_military_square |
return to experience, same sector, quadratic (divided by 100) (wage) |
\(\gamma_{3,3}\) |
any_exp_military |
return to having any military experience |
\(\gamma_{3,4}\) |
period |
linear age effect |
\(\gamma_{3,5}\) |
is_minor |
effect of being a minor |
\(\gamma_{4,4}\) |
period |
linear age effect |
\(\gamma_{4,5}\) |
is_minor |
effect of being a minor |
\(\gamma_{5,4}\) |
is_young_adult |
additional value of staying home if aged 18-20 |
\(\gamma_{5,5}\) |
is_adult |
additional value of staying home if 21 or older |
Mobility and search |
||
\(c_{a,1}\) |
not_exp_{civilian}_collar_lagged |
reward of switching to a from other occupation (non pecuniary) |
\(c_{a,2}\) |
not_any_exp_{civilian}_collar |
reward of working in a for the first time (non pecuniary) |
\(c_{3,2}\) |
not_any_exp_military |
reward of being in the military sector for the first time (non pecuniary) |