The Growth Of Pre School Children

1839 WordsApr 19, 20178 Pages
Micro II lecture 6 Endogenous income 1. At the beginning of the century, the presence of pre-school children was considered as one of the biggest constraints on the labour supply of married women. Even until 1994, only 40 percent of women with a dependent pre-school child were economically active and likely to be part of the formal labour force. Although recent studies of participation rates in 2014 showed a rising employment rate for married women with dependent pre-school children, evidence indicates that women with children are still less likely to work than those without. Is such a family reason of taking care of pre-school children still a major determinant of married women’s participation rate? Or has it ever been a contributive…show more content…
A linear regression model would be used. Seven essential assumptions are made upon the classical linear regression model: (i) zero conditional mean, in which E(ui l Xi) = 0 (ii) Therefore, Cov (ui, xi) = 0 (iii) no serial correlation, such that Cov(ui, uj)=0 (iv) homoscedasticity, var(ui l xi) = sigma^2 (v) the regression model is correctly specified (vi) normally distributed error, ui ~ N(0, sigma^2) (vii) random sampling, Cov(xi, xj) = 0 Under these conditions, a multiple linear regression model is set up, having the working hours (usual basic working hours per week excluding overtime of the married women) as the dependent variables, denoted as Yhours ; and independent variables, denoted as follow: Xwage the gross hourly wage rate of the married female worker constructed from their last gross earnings then divided by their hours Xage age of the married female Xagesq age squared of the married female Xdegree a dummy variable taking 1 if the married female reports that her highest education qualification is a degree, zero otherwise Xhealth a dummy variable taking the value 1 if the married female reports that she has a long standing illness or disability Xchildu5 a dummy variable taking the value 1 if the married female reports there being one or more children in they household
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