Two-Stage Tobit Model and Hakit Sample Selection Model Estimation : the UK labor market survey study

labor economists have identified several possible reasons for observing an inverse relationship in addition to Becker’s original proposition on the negative assortative mating of men and women on wage rates. However, previous empirical literatures that examined the relationship between a wife’s work hours and her husband’s earnings have produced mixed results. Previous empirical studies varied in different econometric methods used in estimation. The endogeneity between husband’s earnings and wife’s working decision would result in omitted variables. Further, the classic ordinary least squares (OLS) procedure also leads to biased and inconsistent results because a wife’s working hours and her husband’s earnings would be jointly determined (Blackaby, Carlin et al. 2007). To test Becker’s original proposition, using 1992 cross-sectional data taken from British General Household Survey (GHS), this paper attempt to estimate the husband’s earnings equation using different econometric techniques. 

The rar file including final report, LIMDEP code, and data file. 2SLS tobit model with instrument variable