Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/104682 
Year of Publication: 
2014
Series/Report no.: 
IZA Discussion Papers No. 8548
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
We compare the performance of maximum likelihood (ML) and simulated method of moments (SMM) estimation for dynamic discrete choice models. We construct and estimate a simplified dynamic structural model of education that captures some basic features of educational choices in the United States in the 1980s and early 1990s. We use estimates from our model to simulate a synthetic dataset and assess the ability of ML and SMM to recover the model parameters on this sample. We investigate the performance of alternative tuning parameters for SMM.
Subjects: 
returns to education
dynamic discrete choice
simulation-based estimation
JEL: 
C13
C15
C35
I21
Document Type: 
Working Paper

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