Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/104991
Authors: 
Mora, Jhon James
Muro, Juan
Year of Publication: 
2014
Citation: 
[Journal:] Economics: The Open-Access, Open-Assessment E-Journal [Volume:] 8 [Issue:] 2014-43 [Pages:] 1-25
Abstract: 
In the presence of selection bias the traditional estimators for pseudo panel data models are inconsistent. This paper discusses a method to achieve consistency in static linear pseudo panels in the presence of selection bias and a testing procedure for sample selection bias. The authors' approach uses a bias correction term proportional to the inverse Mills ratio with argument equal to the "normit" of a consistent estimation of the conditional probability of being observed given cohort membership. Monte Carlo analysis shows the test does not reject the null for fixed T at a 5% significance level in finite samples. As a "side effect" the authors utilize the enlarged pseudo panel to provide a GMM consistent estimation of the pseudo panel parameters under rejection of the null and apply the procedure to estimate the rate of return to education in Colombia.
Subjects: 
Repeated cross-section models
selectivity bias testing
returns to education
JEL: 
C15
C23
C52
I26
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/
Document Type: 
Article

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