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Labor economics: Explain, in detail, what selection bias is, and it's importance when studying the determinants of wages. In your answer, clearly explain why estimating
Labor economics:
Explain, in detail, what selection bias is, and it's importance when studying the determinants of wages. In your answer, clearly explain why estimating a Heckman selection model is preferred to OLS when estimating a standard wage equation, supposing that only 60% of the population is employed.
Be sure to provide equations, variable definitions, and verbal explanations.
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