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Selection-bias correction based on the multinomial logit: An application to the Mexican labor market

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  • Luis Huesca

    (Economics Department, Centro de Investigación en Alimentación y Desarrollo)

  • Mario Camberos

    (Economics Department, Centro de Investigación en Alimentación y Desarrollo)

Abstract

In this presentation, we illustrate an application of a relatively new selection-bias correction methodology based on the multinomial logit model using the selmlog Stata command (Bourguignon, Fournier, and Gurgand, 2007, Journal of Economic Surveys 21: 174–205). selmlog allows for getting both consistent and efficient estimates of the selection process and a fairly good correction for the outcome equation, even when the independence of irrelevant alternatives (IIA) assumption is not achieved. The exercise depicts the current pattern of the occupational choices for the individuals in the Mexican labor market using a longitudinal panel with microdata from the Encuesta Nacional de Ocupación y Empleo (ENOE) during February 2008 to March 2009. We estimate an equation over an endogenously selected population. The command grants simplicity for both distributional and IIA assumptions for parametric models.

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File URL: http://fmwww.bc.edu/repec/msug2010/mex10sug_huesca.pdf
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Paper provided by Stata Users Group in its series Mexican Stata Users' Group Meetings 2010 with number 08.

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Date of creation: 10 Jun 2010
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Handle: RePEc:boc:msug10:08

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Web page: http://www.stata.com/meeting/mexico10
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  1. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
  2. Lee, Lung-Fei, 1983. "Generalized Econometric Models with Selectivity," Econometrica, Econometric Society, vol. 51(2), pages 507-12, March.
  3. Hausman, Jerry & McFadden, Daniel, 1984. "Specification Tests for the Multinomial Logit Model," Econometrica, Econometric Society, vol. 52(5), pages 1219-40, September.
  4. François Bourguignon & Martin Fournier & Marc Gurgand, 2007. "Selection Bias Corrections Based On The Multinomial Logit Model: Monte Carlo Comparisons," Journal of Economic Surveys, Wiley Blackwell, vol. 21(1), pages 174-205, 02.
  5. Kristin F. Butcher & John DiNardo, 2002. "The Immigrant and native-born wage distributions: Evidence from United States censuses," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 56(1), pages 97-121, October.
  6. Schmertmann, Carl P., 1994. "Selectivity bias correction methods in polychotomous sample selection models," Journal of Econometrics, Elsevier, vol. 60(1-2), pages 101-132.
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