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Simultaneity in binary outcome models with an application to employment for couples

Abstract:
Two of Peter Schmidt’s many contributions to econometrics have been to introduce a simultaneous logit model for bivariate binary outcomes and to study estimation of dynamic linear fixed effects panel data models using short panels. In this paper, we study a dynamic panel data version of the bivariate model introduced in Schmidt and Strauss (Econometrica 43:745–755, 1975) that allows for lagged dependent variables and fixed effects as in Ahn and Schmidt (J Econom 68:5–27, 1995). We combine a conditional likelihood approach with a method of moments approach to obtain an estimation strategy for the resulting model. We apply this estimation strategy to a simple model for the intra-household relationship in employment. Our main conclusion is that the within-household dependence in employment differs significantly by the ethnicity composition of the couple even after one allows for unobserved household specific heterogeneity.
Publication status:
Published
Peer review status:
Peer reviewed

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Publisher copy:
10.1007/s00181-023-02417-7

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Role:
Author
ORCID:
0000-0003-3662-1717
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Institution:
University of Oxford
Division:
SSD
Department:
Economics
Oxford college:
Nuffield College
Role:
Author


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Funder identifier:
https://ror.org/0472cxd90
Grant:
2018-CoG-819086-PANEDA
819086


Publisher:
Springer
Journal:
Empirical Economics More from this journal
Volume:
64
Issue:
6
Pages:
3197-3233
Publication date:
2023-05-04
Acceptance date:
2023-03-17
DOI:
EISSN:
1435-8921
ISSN:
0377-7332
Pmid:
37405261


Language:
English
Keywords:
Pubs id:
1680272
Local pid:
pubs:1680272
Deposit date:
2024-08-02

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