Maximum likelihood, Optimization, C87,

This paper describes the implementation of Heckman-type sample selection models in R. We discuss the sample selection problem as well as the Heckman solution to it, and argue that although modern econometrics has non-and semiparametric estimation methods in its toolbox, Heckman models are an integral part of the modern applied analysis and econometrics syllabus. We describe the implementation of these models in the package sampleSelection and illustrate the usage of the package on several simulation and real data examples. Our examples demonstrate the effect of exclusion restrictions, identification at infinity and misspecification. We argue that the package can be used both in applied research and teaching.

This paper analyzes the return to dominant language fluency for ethnic Russians in the Baltic States. We look at male workers using Estonian Labor Force Survey for years 2000-2010 and the 1998 wave of a panel of high-school graduates of 1982. The results indicate that the ethnic Russian men enjoy little income premium on their skills of the dominant language. We identify positive returns only in the low end of the income distribution and in public administration sector. Surprisingly, the returns to English fluency are far larger. These outcomes point toward segregation and discrimination at the upper-end hiring.

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