Use MROZ.RAW for this exercise. (i) Reestimate the labor supply function in Example 16.5, using log(hours) as
Question:
(i) Reestimate the labor supply function in Example 16.5, using log(hours) as the dependent variable. Compare the estimated elasticity (which is now constant) to the estimate obtained from equation (16.24) at the average hours worked.
(ii) In the labor supply equation from part (i), allow educ to be endogenous because of omitted ability. Use motheduc and fatheduc as IVs for educ. Remember, you now have two endogenous variables in the equation.
(iii) Test the over identifying restrictions in the 2SLS estimation from part (ii). Do the IVs pass the test?
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111 We estimate a constant elasticity version of the labor supply equation naturally only for hours ...View the full answer
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Related Book For 
Introductory Econometrics A Modern Approach
ISBN: 978-0324660548
4th edition
Authors: Jeffrey M. Wooldridge
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