Binary Choice with Binary Endogenous Regressors in Panel Data: Estimating the Effect of Fertility on Female Labor Participation
AbstractThis article considers the estimation of the causal effect of fertility on female-labor-force participation equations. My main concern is to examine two considerations, the endogeneity of fertility and the impact of controlling for unobserved heterogeneity and for predetermined existing children. Using PSID data, a switching binary panel-data model that accounts for selectivity bias as well as for other forms of time-invariant unobserved heterogeneity is estimated. Individual effects are allowed to be correlated with the explanatory variables, which can be predetermined as opposed to strictly exogenous. Family sex composition is used as an instrument for exogenous fertility movements. The results indicate that exogeneity assumptions of children variables induce a downward bias in absolute value in the estimated negative effect of fertility on participation, although the failure to account for unobserved heterogeneity overstates this effect. Moreover, stronger effects of fertility are found when existing children are treated as predetermined but not strictly exogenous variables.
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Bibliographic InfoArticle provided by American Statistical Association in its journal Journal of Business and Economic Statistics.
Volume (Year): 19 (2001)
Issue (Month): 4 (October)
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Web page: http://www.amstat.org/publications/jbes/index.cfm?fuseaction=main
Other versions of this item:
- Raquel Carrasco, 1999. "Binary Choice with Binary Endogenous Regressors in Panel Data: Estimating the Effect of Fertility on Female Labour Participation," Working Papers 1999.3, Fondazione Eni Enrico Mattei.
- Carrasco, R., 1998. "Binary Choice with Binary Endogenous Regressors in Panel Data: Estimating the Effect of Fertility on Female Labour Participation," Papers 9805, Centro de Estudios Monetarios Y Financieros-.
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
- J2 - Labor and Demographic Economics - - Demand and Supply of Labor
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
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