Estimating Wage Disparities Using Foundation Models

One thread of empirical work in social science focuses on decomposing group differences in outcomes into unexplained components and components explained by observable factors. In this paper, we study gender wage decompositions, which require estimating the portion of the gender wage gap explained by career histories of workers. Classical methods for decomposing the wage gap employ simple predictive models of wages which condition on a small set of simple summaries of labor history. The problem is that these predictive models cannot take advantage of the full complexity of a worker's history, and the resulting decompositions thus suffer from omitted variable bias (OVB), where covariates that are correlated with both gender and wages are not included in the model. Here we explore an alternative methodology for wage gap decomposition that employs powerful foundation models, such as large language models, as the predictive engine. Foundation models excel at making accurate predictions from complex, high-dimensional inputs. We use a custom-built foundation model, designed to predict wages from full labor histories, to decompose the gender wage gap. We prove that the way such models are usually trained might still lead to OVB, but develop fine-tuning algorithms that empirically mitigate this issue. Our model captures a richer representation of career history than simple models and predicts wages more accurately. In detail, we first provide a novel set of conditions under which an estimator of the wage gap based on a fine-tuned foundation model is $\sqrt{n}$-consistent. Building on the theory, we then propose methods for fine-tuning foundation models that minimize OVB. Using data from the Panel Study of Income Dynamics, we find that history explains more of the gender wage gap than standard econometric models can measure, and we identify elements of history that are important for reducing OVB.

LABOR-LLM: Language-Based Occupational Representations with Large Language Models

Many empirical studies of labor market questions rely on estimating relatively simple predictive models using small, carefully constructed longitudinal survey datasets based on hand-engineered features. Large Language Models (LLMs), trained on massive datasets, encode vast quantities of world knowledge and can be used for the next job prediction problem. However, while an off-the-shelf LLM produces plausible career trajectories when prompted, the probability with which an LLM predicts a particular job transition conditional on career history will not, in general, align with the true conditional probability in a given population. Recently, Vafa et al. (2024) introduced a transformer-based "foundation model", CAREER, trained using a large, unrepresentative resume dataset, that predicts transitions between jobs; it further demonstrated how transfer learning techniques can be used to leverage the foundation model to build better predictive models of both transitions and wages that reflect conditional transition probabilities found in nationally representative survey datasets. This paper considers an alternative where the fine-tuning of the CAREER foundation model is replaced by fine-tuning LLMs. For the task of next job prediction, we demonstrate that models trained with our approach outperform several alternatives in terms of predictive performance on the survey data, including traditional econometric models, CAREER, and LLMs with in-context learning, even though the LLM can in principle predict job titles that are not allowed in the survey data. Further, we show that our fine-tuned LLM-based models' predictions are more representative of the career trajectories of various workforce subpopulations than off-the-shelf LLM models and CAREER. We conduct experiments and analyses that highlight the sources of the gains in the performance of our models for representative predictions.

Evaluating the World Model Implicit in a Generative Model

Recent work suggests that large language models may implicitly learn world models. How should we assess this possibility? We formalize this question for the case where the underlying reality is governed by a deterministic finite automaton. This includes problems as diverse as simple logical reasoning, geographic navigation, game-playing, and chemistry. We propose new evaluation metrics for world model recovery inspired by the classic Myhill-Nerode theorem from language theory. We illustrate their utility in three domains: game playing, logic puzzles, and navigation. In all domains, the generative models we consider do well on existing diagnostics for assessing world models, but our evaluation metrics reveal their world models to be far less coherent than they appear. Such incoherence creates fragility: using a generative model to solve related but subtly different tasks can lead it to fail badly. Building generative models that meaningfully capture the underlying logic of the domains they model would be immensely valuable; our results suggest new ways to assess how close a given model is to that goal.

Do Large Language Models Perform the Way People Expect? Measuring the Human Generalization Function

What makes large language models (LLMs) impressive is also what makes them hard to evaluate: their diversity of uses. To evaluate these models, we must understand the purposes they will be used for. We consider a setting where these deployment decisions are made by people, and in particular, people's beliefs about where an LLM will perform well. We model such beliefs as the consequence of a human generalization function: having seen what an LLM gets right or wrong, people generalize to where else it might succeed. We collect a dataset of 19K examples of how humans make generalizations across 79 tasks from the MMLU and BIG-Bench benchmarks. We show that the human generalization function can be predicted using NLP methods: people have consistent structured ways to generalize. We then evaluate LLM alignment with the human generalization function. Our results show that -- especially for cases where the cost of mistakes is high -- more capable models (e.g. GPT-4) can do worse on the instances people choose to use them for, exactly because they are not aligned with the human generalization function.

Revisiting Topic-Guided Language Models

A recent line of work in natural language processing has aimed to combine language models and topic models. These topic-guided language models augment neural language models with topic models, unsupervised learning methods that can discover document-level patterns of word use. This paper compares the effectiveness of these methods in a standardized setting. We study four topic-guided language models and two baselines, evaluating the held-out predictive performance of each model on four corpora. Surprisingly, we find that none of these methods outperform a standard LSTM language model baseline, and most fail to learn good topics. Further, we train a probe of the neural language model that shows that the baseline's hidden states already encode topic information. We make public all code used for this study.

An Invariant Learning Characterization of Controlled Text Generation

Controlled generation refers to the problem of creating text that contains stylistic or semantic attributes of interest. Many approaches reduce this problem to training a predictor of the desired attribute. For example, researchers hoping to deploy a large language model to produce non-toxic content may use a toxicity classifier to filter generated text. In practice, the generated text to classify, which is determined by user prompts, may come from a wide range of distributions. In this paper, we show that the performance of controlled generation may be poor if the distributions of text in response to user prompts differ from the distribution the predictor was trained on. To address this problem, we cast controlled generation under distribution shift as an invariant learning problem: the most effective predictor should be invariant across multiple text environments. We then discuss a natural solution that arises from this characterization and propose heuristics for selecting natural environments. We study this characterization and the proposed method empirically using both synthetic and real data. Experiments demonstrate both the challenge of distribution shift in controlled generation and the potential of invariance methods in this setting.

Learning Transferrable Representations of Career Trajectories for Economic Prediction

Understanding career trajectories -- the sequences of jobs that individuals hold over their working lives -- is important to economists for studying labor markets. In the past, economists have estimated relevant quantities by fitting predictive models to small surveys, but in recent years large datasets of online resumes have also become available. These new datasets provide job sequences of many more individuals, but they are too large and complex for standard econometric modeling. To this end, we adapt ideas from modern language modeling to the analysis of large-scale job sequence data. We develop CAREER, a transformer-based model that learns a low-dimensional representation of an individual's job history. This representation can be used to predict jobs directly on a large dataset, or can be "transferred" to represent jobs in smaller and better-curated datasets. We fit the model to a large dataset of resumes, 24 million people who are involved in more than a thousand unique occupations. It forms accurate predictions on held-out data, and it learns useful career representations that can be fine-tuned to make accurate predictions on common economics datasets.

Rationales for Sequential Predictions

Sequence models are a critical component of modern NLP systems, but their predictions are difficult to explain. We consider model explanations though rationales, subsets of context that can explain individual model predictions. We find sequential rationales by solving a combinatorial optimization: the best rationale is the smallest subset of input tokens that would predict the same output as the full sequence. Enumerating all subsets is intractable, so we propose an efficient greedy algorithm to approximate this objective. The algorithm, which is called greedy rationalization, applies to any model. For this approach to be effective, the model should form compatible conditional distributions when making predictions on incomplete subsets of the context. This condition can be enforced with a short fine-tuning step. We study greedy rationalization on language modeling and machine translation. Compared to existing baselines, greedy rationalization is best at optimizing the combinatorial objective and provides the most faithful rationales. On a new dataset of annotated sequential rationales, greedy rationales are most similar to human rationales.

Text-Based Ideal Points

Ideal point models analyze lawmakers' votes to quantify their political positions, or ideal points. But votes are not the only way to express a political position. Lawmakers also give speeches, release press statements, and post tweets. In this paper, we introduce the text-based ideal point model (TBIP), an unsupervised probabilistic topic model that analyzes texts to quantify the political positions of its authors. We demonstrate the TBIP with two types of politicized text data: U.S. Senate speeches and senator tweets. Though the model does not analyze their votes or political affiliations, the TBIP separates lawmakers by party, learns interpretable politicized topics, and infers ideal points close to the classical vote-based ideal points. One benefit of analyzing texts, as opposed to votes, is that the TBIP can estimate ideal points of anyone who authors political texts, including non-voting actors. To this end, we use it to study tweets from the 2020 Democratic presidential candidates. Using only the texts of their tweets, it identifies them along an interpretable progressive-to-moderate spectrum.

Discrete Flows: Invertible Generative Models of Discrete Data

While normalizing flows have led to significant advances in modeling high-dimensional continuous distributions, their applicability to discrete distributions remains unknown. In this paper, we show that flows can in fact be extended to discrete events---and under a simple change-of-variables formula not requiring log-determinant-Jacobian computations. Discrete flows have numerous applications. We consider two flow architectures: discrete autoregressive flows that enable bidirectionality, allowing, for example, tokens in text to depend on both left-to-right and right-to-left contexts in an exact language model; and discrete bipartite flows that enable efficient non-autoregressive generation as in RealNVP. Empirically, we find that discrete autoregressive flows outperform autoregressive baselines on synthetic discrete distributions, an addition task, and Potts models; and bipartite flows can obtain competitive performance with autoregressive baselines on character-level language modeling for Penn Tree Bank and text8.