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Deriving conditional and unconditional marginal effects in log earnings equations estimated by Heckman's procedure

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  • Rodolfo Hoffmann
  • Ana Lucia Kassouf

Abstract

Although the Heckman approach has often been used in empirical analysis, the marginal effects, necessary to interpret the effect of the regressors on the dependent variable, appeared to be overlooked. Using the Heckman approach, general expressions are derived for calculating the conditional and unconditional marginal effects. Based on a sample of Brazilian women, the conditional and unconditional return to education are calculated for the logarithm of earnings equation estimated by Heckman's procedure, comparing them to the marginal effect of education obtained without correcting for selectivity bias. The same analysis is carried out for a discrete variable 'black'.

Suggested Citation

  • 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.
    • Handle: RePEc:taf:applec:v:37:y:2005:i:11:p:1303-1311
    DOI: 10.1080/00036840500118614
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    References listed on IDEAS

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    1. Atanu Saha & Oral Capps & Patrick Byrne, 1997. "Calculating marginal effects in models for zero expenditures in household budgets using a Heckman-type correction," Applied Economics, Taylor & Francis Journals, vol. 29(10), pages 1311-1316.
    2. James P. Smith, 2005. "Female Labor Supply: Theory and Estimation -- Introduction," Labor and Demography 0501007, University Library of Munich, Germany.
    3. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    4. 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.
    5. Peter Kennedy, 2003. "A Guide to Econometrics, 5th Edition," MIT Press Books, The MIT Press, edition 5, volume 1, number 026261183x, April.
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