SECTION A: Answer the ONE question

1.

The following is a set of results from analyses performed by a researcher, using the data used by Mroz, T. (1987) “The sensitivity of an empirical model of married women’s         hours of work to economic and statistical assumptions. Econometrica, (55:4), pp. 765- 799. The variables used are as follows:

inlf

hours

kidslt6 kidsge6

age

educ

wage

faminc

exper

nwifeinc lwage

expersq

=1 if in lab frce, 1975

# of hours worked, 1975

# kids < 6 years

# kids 6- 18

woman's age in yrs

years of schooling

hourly wage rate

family income, 1975

actual labour market experience

family income excluding the woman’s income

log(wage)

experience-squared

VARIABLES

[1]

Hours

[2]

lwage

[3]

Labour force

Participation

[4]

lwage

[5]

Labour force

Participation

Estimator

Tobit

2-step Heckman

Heckman 1st step

MLE

MLE

nwifeinc

-8.814** (4.459)

-0.012**

(0.005)

-0.012**

(0.005)

educ

80.645***

0.109***

0.131***

0.108***

0.131***

(21.583)

(0 .016)

(0 .025)

(0 .015)

(0.025)

exper

131.564***

0.044***

0.123***

0.043***

0.123***

(17.279)

(0.016)

(0.019)

(0.015)

(0.019)

expersq

-1.864***

-0.001*

-0.002***

-0.001**

-0.002***

(0.538)

(0.000)

(0.001)

(0.000)

(0.001)

age

-54.405***

(7.418)

-0.053***

(0.008)

-0.053***

(0.008)

kidslt6

-894.020***

(111.878)

-0.868***

(0.119)

-0.867***

(0.119)

kidsge6

-16.218 -8.814**

0.036

(0.043)

0.036

(0.043)

/athrho

/lnsigma

0.027

(0.147)

-0.410***

(0.034)

Rho

0.027 (0.147)

Sigma

Inverse

0.663***

(0.023)

0.018

Mill’s Ratio

(0.100)

Constant 965.307**                  -0.578*

0.270 -0.553**

0.266

(446.435)                   (0.305)

(0.509)                    (0.260)

(0.509)

Ln likelihood

-832.9

R-squared