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The Wage Rate Estimation Using the Heckman Procedure

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  • Kassouf, Ana Lucia

Abstract

This paper estimates wage rates using the Heckman Procedure and a traditional method. The estimation becomes necessary when the analysis requires a measure of the individual's opportunity cost of time. Since a large fraction of the adults in the sample do not participate in the labor market, the simple estimation by ordinary least squares would cause bias in the coefficients. Labor force participation and the wage determination equations were estimated for men and women from 16 to 71 years old. Most of the coefficients were statistically significant at 10% level and presented the expected signs. It was found an upward biased (in absolute value) estimate for male workers and a downward biased (in absolute value) estimate for the female workers when using the traditional method of estimation.

Suggested Citation

  • Kassouf, Ana Lucia, 1994. "The Wage Rate Estimation Using the Heckman Procedure," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 14(1), April.
    • Handle: RePEc:sbe:breart:v:14:y:1994:i:1:a:2979
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    1. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    2. Ben Senauer & David Sahn & Harold Alderman, 1986. "The Effect of the Value of Time on Food Consumption Patterns in Developing Countries: Evidence from Sri Lanka," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(4), pages 920-927.
    3. Heckman, James J, 1974. "Shadow Prices, Market Wages, and Labor Supply," Econometrica, Econometric Society, vol. 42(4), pages 679-694, July.
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    Cited by:

    1. Juliana Kikuchi Van Zaist & Luciano Nakabashi & Márcio A. Salvato, 2009. "Retornos privados de educação individual no Paraná," Working Papers 0097, Universidade Federal do Paraná, Department of Economics.
    2. Rodolfo Hoffmann & Ana Lucia Kassouf, 2005. "Deriving conditional and unconditional marginal effects in log earnings equations estimated by Heckman's procedure," Applied Economics, Taylor & Francis Journals, vol. 37(11), pages 1303-1311.
    3. Letícia Xander Russo & Joilson Dias, 2016. "The Health Influence On Returns To Education In Brazil: A Nonlinear Approach," Anais do XLII Encontro Nacional de Economia [Proceedings of the 42nd Brazilian Economics Meeting] 200, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    4. Ferraz, Diogo & Ribeiro de Oliveira, Fabíola Cristina, 2018. "Impact of the National Professional Qualification Program (PNQ) on Income: An Econometric Analysis in Piracicaba/SP-Brazil," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 28(2), pages 105-123.

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