----- Original Message -----
From: "Maureen Paul" <[email protected]>
To: <[email protected]>
Sent: Wednesday, May 21, 2003 12:04 PM
Subject: st: General question
> Hi
>
> I am estimating a fixed effects female labour supply model and wondered if
I should still be worried about the problem of sample selection bias (not
endogeneity). Since sample selection is effectively an omitted variables
problem, does the fixed effects model take care of this or should I still
seek to correct for sample selection?
>
> Thanks
> Maureen
>
Maureen,
You might want to take a look at Jeff Wooldridge's "Econometric Analysis of
Cross Section and Panel Data" section 17.7 'Sample Selection and Attrition
in Linear Panel Data Models'
The conclusion, for fixed effects models, is that sample selection is only a
problem when selection is related to the idiosyncratic errors, uit.
Wooldrige proposes, following Nijman and Verbeek ['Nonresponse in Panel
Data: The Impact on Estimates of a Life Cycle Consumption Function' Journal
of Applied Econometrics, 1992], a simple test for selection bias in either
random or fixed effects.
Hope this helps,
Scott
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