A control function approach to estimating dynamic probit models with endogenous regressors, with an application to the study of poverty persistence in China
AbstractThis paper proposes a parametric approach to estimating a dynamic binary response panel data model that allows for endogenous contemporaneous regressors. This approach is of particular value for settings in which one wants to estimate the effects of an endogenous treatment on a binary outcome. The model is next used to examine the impact of rural-urban migration on the likelihood that households in rural China fall below the poverty line. In this application, it is shown that migration is important for reducing the likelihood that poor households remain in poverty and that non-poor households fall into poverty. Furthermore, it is demonstrated that failure to control for unobserved heterogeneity would lead the researcher to underestimate the impact of migrant labor markets on reducing the probability of falling into poverty.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 5400.
Date of creation: 01 Aug 2010
Date of revision:
Rural Poverty Reduction; Population Policies; Achieving Shared Growth; Debt Markets; Regional Economic Development;
Other versions of this item:
- Giles, John T. & Murtazashvili, Irina, 2012. "A Control Function Approach to Estimating Dynamic Probit Models with Endogenous Regressors, with an Application to the Study of Poverty Persistence in China," IZA Discussion Papers 6887, Institute for the Study of Labor (IZA).
- C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- P25 - Economic Systems - - Socialist Systems and Transition Economies - - - Urban, Rural, and Regional Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-08-21 (All new papers)
- NEP-CNA-2010-08-21 (China)
- NEP-ECM-2010-08-21 (Econometrics)
- NEP-MIG-2010-08-21 (Economics of Human Migration)
- NEP-TRA-2010-08-21 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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