A Two-Step First Difference Estimator for a Panel Data Tobit Model under Conditional Mean Independence Assumptions

This study develops a two-step estimator for a panel data Tobit model based on taking first-differences of the equation of interest, under conditional mean independence assumptions.The necessary correction terms are non-standard and a substantial part is therefore devoted to the formal derivation of these correction terms.The main advantage of this estimator is that it yields estimates that are far less sensitivity to misspecification of the conditional mean independence assumption than an estimation procedure set up in levels.Monte Carlo simulations are provided in support of this.panel data;estimating;monte carlo technique

A Maximum Likelihood Estimator based on First Differences for a Panel Data Tobit Model with Individual Specific Effects

This paper proposes an alternative estimation procedure for a panel data Tobit model with individual specific effects based on taking first differences of the equation of interest. This helps to alleviate the sensitivity of the estimates to a specific parameterization of the individual specific effects and some Monte Carlo evidence is provided in support of this. To allow for arbitrary serial correlation estimation takes place in two steps: Maximum Likelihood is applied to each pair of consecutive periods and then a Minimum Distance estimator is employed.

Estimating the Economic Return to Schooling on the Basis of Panel Data

This paper is concerned with estimating the economic return to schooling of men in the Netherlands.We adopt an IV approach to estimate a panel data model with random individual effects.We exploit the fact that older individuals have relatively less schooling compared to younger individuals to construct instruments and include GNP per worker at the time an individual tumed 16 to control for birth-cohort effects.The estimated return to schooling is about 15%. Ignoring the endogencity of schooling results in a lower return to schooling. Ignoring birth-cohort effects results in a lower return to work experience.panel data;education;gross national product;The Netherlands

How Good is Growth for the Poor? The Role of Initial Income Distribution in Regional Diversity in Poverty Trends

Using panel data of 58 developing countries for the period 1980-1998, this study shows that the responsiveness of the $2 a day poverty headcount measure to changes in mean income and inequality significantly decreases with initial inequality and the ratio poverty line over mean income - taken as proxies for the initial density of income near the poverty line.Variations in these proxies account for the large crossregional differences in the income elasticity of poverty during the 1980s and 1990s.We find that the income elasticity of poverty in the mid 1990s equals -1.31 on average and ranges from -0.71 for Sub-Saharan Africa to -2.27 for the Middle East and North Africa, and that the Gini elasticity of poverty equals 0.80 on average and ranges from 0.01 in South Asia to 1.73 in Latin America.While variation in income growth accounts for most of the variation in poverty reduction across regions, the impact of variations in inequality and in elasticities of poverty is almost always too large to be ignored, and in particular in Eastern Europe and Central Asia.Panel data;Poverty;Income Growth;Inequality

Female Employment and Timing of Births Decisions: A Multiple State Transition Model

In this paper we estimate a multiple state transition model, describing transitions into maternity and labor market transitions for women.Each state is characterized by two components: the labor market state and the maternity state. This enables us to investigate to disentangle the effects of socio-economic variables on the timing of births and on labor market transitions.We find that the transition intensities into maternity are significantly higher for non-employed women than for employed women, and transition intensities into employment are significantly higher for women with no children than for women with children.Lower educated non-employed women have a higher transition probability into maternity and lower transition probability into employment than higher educated non-employed women.female workers;models;pregnancy

Health and Labor Force Participation of the Elderly in Europe: What do Objective Health Measures Add to the Analysis?

In this paper, we study labour force participation behaviour of individuals aged 50-64 in 11 European countries.The data are drawn from the new Survey of Health, Ageing and Retirement in Europe (SHARE).We examine the value added of objective health variables in relation to potentially endogenous self-reported health.We approach the endogeneity of self-reported health as an omitted variables problem.In line with the literature on the reliability of self-reported health, ambiguous results are obtained.In some countries, self-reported health does a fairly good job: controlling for extra health related variables does not seem to add much to the analysis.In other countries, however, self-reported health is clearly endogenous with results that are in line with the justi.cation hypothesis.They illustrate the multidimensional nature of health and the need to control for objective health variables when analyzing labour force participation behaviour.This makes an instrumental variables approach to deal with endogenous self-reported health less appropriate.SHARE;labour force participation;self-reported health;objective health;retirement

Labour Force Participation of the Elderly in Europe: The Importance of Being Healthy

In this paper we study labour force participation behaviour of individuals aged 50-64 in 11 European countries.The data are drawn from the new Survey of Health, Ageing and Retirement in Europe (SHARE).The empirical analysis shows that health is multi-dimensional, in the sense that different health indicators have their own significant impact on individuals' participation decisions.Health effects differ markedly between countries.A counterfactual exercise shows that improved health conditions may yield over 10 percentage points higher participation rates for men in countries like Austria, Germany and Spain, and for females in the Netherlands and Sweden.Moreover, we show that the declining health condition with age accounts considerably for the decline in participation rates with age.SHARE;labour force participation;health;retirement

Estimating the Economic Return to Schooling on the Basis of Panel Data

This paper is concerned with estimating the economic return to schooling of men in the Netherlands.We adopt an IV approach to estimate a panel data model with random individual effects.We exploit the fact that older individuals have relatively less schooling compared to younger individuals to construct instruments and include GNP per worker at the time an individual tumed 16 to control for birth-cohort effects.The estimated return to schooling is about 15%. Ignoring the endogencity of schooling results in a lower return to schooling. Ignoring birth-cohort effects results in a lower return to work experience.

A Maximum Likelihood Estimator based on First Differences for a Panel Data Tobit Model with Individual Specific Effects

This paper proposes an alternative estimation procedure for a panel data Tobit model with individual specific effects based on taking first differences of the equation of interest. This helps to alleviate the sensitivity of the estimates to a specific parameterization of the individual specific effects and some Monte Carlo evidence is provided in support of this. To allow for arbitrary serial correlation estimation takes place in two steps: Maximum Likelihood is applied to each pair of consecutive periods and then a Minimum Distance estimator is employed.