You want to study female labor force participation using a sample of 872 women from Switzerland. The dependent variable is participation (=1 if in the labor force), which you regress on variables income (in $1000), education (years of schooling), age, age², numbers of younger (0-8 years old) and older children (youngkids and oldkids), and on the factor foreign, which indicates citizenship (=1 if not Swiss). You first run this regression using a linear probability model (LPM) and obtain the following results:

Now you estimate the model using Probit and obtain the following results:

Sofia is a 39 years old Swiss female with a 10,000 annual income, 12 years of schooling, and has one 8-year-old child. How will the predicted probability of Sofia being in the labor market change when she turns 40 years old? Hint: When Sofia turns 40 years old, her child turns 9 years old.

	a.	-0.009
	b.	0.069
	c.	0.218
	d.	0.191

The effect of income on labor force participation estimated by Probit is -0.667, while the same effect estimated by LPM is just -0.212.

True

False