The Econometric SocietyEdited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262
Econometrica: Sep, 1990, Volume 58, Issue 5
https://doi.org/0012-9682(199009)58:5<1121:TECOTR>2.0.CO;2-K
p. 1121-1149
Bo E. Honore, James J. Heckman
This paper clarifies and extends the classical Roy model of self selection and earnings inequality. The original Roy model, based on the assumption that log skills are normally distributed, is shown to imply that pursuit of comparative advantage in a free market reduces earnings inequality compared to the earnings distribution that would result if workers were randomly assigned to sectors. Aggregate log earnings are right skewed even if one sectoral distribution is left skewed. Most major implications of the log normal Roy model survive if differences in skills are log concave. However few implications of the model survive if skills are generated from more general distributions. We consider the identifiability of the Roy model from data on earnings distributions. The normal theory version is identifiable without regressors or exclusion restrictions. Sectoral distributions can be identified knowing only the aggregate earnings distribution. For general skill distributions, the model is not identified and has no empirical content. With sufficient price variation, the model can be identified from multimarket data. Cross-sectional variation in regressors can substitute for price variation in restoring empirical content to the Roy model.
March 5, 2024
The terms of the Editors of the Econometric Society's three journals end June 30, 2025. We are pleased to announce the incoming Editors and to thank the outgoing Editors for their excellent and continuing service.
Econometrica: Since 2019, Guido Imbens has served as the 14th Editor of Econometrica. On July 1, 2025, Marina Halac will become the Editor.
Quantitative Economics: Stéphane Bonhomme has been the Editor of Quantitative Economics since 2021. His successor will be Bernard Salanié.
Theoretical Economics: The Editor of Theoretical Economics since 2021 has been Simon Board. Taking over for him in July 2025 will be Federico Echenique.
Guido, Stéphane, and Simon have been outstanding Editors. We are grateful to them for the work they have done and will continue to do, and we look forward to further congratulating them next year. We believe Marina, Bernard, and Federico will be outstanding successors and we thank them in advance for their service.
Finally, we are grateful to Larry Samuelson for chairing all three search committees, and we thank the search committee members for their hard and fruitful work:
Econometrica: Christian Dustmann, Lars Hansen, Alessandro Lizzeri, George Mailath, Ariel Pakes, Helene Rey, and Elie Tamer.
QE: Kate Ho, Michael Keane, Felix Kubler, Whitney Newey, and Frank Schorfheide.
TE: Jeff Ely, Johannes Horner, Gilat Levy, Meg Meyer, and Ran Spiegler.
