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A bivariate probit approach to the determination of employment: a study of teen employment differentials in Los Angeles County

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  • Madhu Mohanty

Abstract

Following a bivariate probit approach and using the 1990 Public Use Microdata Samples (PUMS) for Los Angeles County, this study shows that the employment of teenage workers depends on both the worker's participation decision as well as the employer's hiring decision. Omission of the role of participation decision from the estimation of employment probability yields misleading evidence of hiring discrimination against Blacks. This evidence, however, disappears when the participation and hiring equations are estimated jointly in a bivariate framework. The study finds no evidence of discrimination against females and Latinos. In addition, the study shows that family, household and neighbourhood characteristics play significant roles in the determination of teen employment.

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  • Madhu Mohanty, 2002. "A bivariate probit approach to the determination of employment: a study of teen employment differentials in Los Angeles County," Applied Economics, Taylor & Francis Journals, vol. 34(2), pages 143-156.
  • Handle: RePEc:taf:applec:v:34:y:2002:i:2:p:143-156
    DOI: 10.1080/00036840010028585
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    1. Meng, Chun-Lo & Schmidt, Peter, 1985. "On the Cost of Partial Observability in the Bivariate Probit Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(1), pages 71-85, February.
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    7. John M. Abowd & Henry S. Farber, 1982. "Job Queues and the Union Status of Workers," ILR Review, Cornell University, ILR School, vol. 35(3), pages 354-367, April.
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    Cited by:

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    3. Maksym Obrizan, 2011. "A Bayesian Model of Sample Selection with a Discrete Outcome Variable: Detecting Depression in Older Adults," Discussion Papers 41, Kyiv School of Economics.
    4. Morais, Flávio & Serrasqueiro, Zélia & Ramalho, Joaquim J.S., 2020. "The zero-leverage phenomenon: A bivariate probit with partial observability approach," Research in International Business and Finance, Elsevier, vol. 53(C).
    5. Kwadwo Opoku & Francisco M.P. Mugizi & Emmanuel Adu Boahen, 2021. "Gender differences in formal wage employment in urban Tanzania," WIDER Working Paper Series wp-2021-99, World Institute for Development Economic Research (UNU-WIDER).
    6. Maksym, Obrizan, 2010. "A Bayesian Model of Sample Selection with a Discrete Outcome Variable," MPRA Paper 28577, University Library of Munich, Germany.
    7. Guifu Chen & Shigeyuki Hamori, 2014. "Bivariate Probit Analysis of the Differences Between Male and Female Formal Employment in Urban China," SpringerBriefs in Economics, in: Rural Labor Migration, Discrimination, and the New Dual Labor Market in China, edition 127, chapter 0, pages 65-76, Springer.

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