1.

18 marks

a) LPM_Full

Source | SS df MS Number of obs = 753

-------------+---------------------------------- F(7, 745) = 38.05
Model | 48.6547158 7 6.95067369 Prob > F = 0.0000
Residual | 136.07304 745 .182648376 R-squared = 0.2634
-------------+---------------------------------- Adj R-squared = 0.2565
Total | 184.727756 752 .245648611 Root MSE = .42737

------------------------------------------------------------------------------
inlf | Coef. Std. Err. t P>|t| [95% Conf. Interval]
-------------+----------------------------------------------------------------
kidslt6 | -.2656547 .0333245 -7.97 0.000 -.3310759 -.2002335
educ | .0375719 .0073874 5.09 0.000 .0230694 .0520744
age | -.0168471 .0023476 -7.18 0.000 -.0214559 -.0122384
nwifeinc | -.0032333 .0014741 -2.19 0.029 -.0061272 -.0003395
exper | .0391935 .005671 6.91 0.000 .0280604 .0503266
expersq | -.0005989 .0001853 -3.23 0.001 -.0009627 -.0002351
city | -.0122969 .0338839 -0.36 0.717 -.0788161 .0542224
_cons | .6495022 .1393078 4.66 0.000 .3760197 .9229847
------------------------------------------------------------------------------

b)

The coefficient on Kids less than 6, shows that having one more kid that is less
than six reduces the probability of the woman being in the workforce by
0.2656547. The T-stat is -7.97 which is very significant at the 5% level since 7.97
is greater than 1.96. Hence the effect is different from zero and we can reject the
null. Also, the P value is 0, which means it is very significant

The coefficient on Educ implies that when education increases by one unit, the
probability of the woman being in the labour force increases by 0.0375719. Since
the T-stat is 5.09, at the 5% interval, we can say that education is very significant
since it is greater than 1.96. Hence, we cannot reject the null and education does
have an effect on whether the woman is in the labour force or not.

The coefficient on non-wife income implies that when when the non- wife
income increases by one unit, it decreases the probability that the woman is in
the labour force by 0.0032333. The t-stat for this -2.19 which is greater than 1.96
which makes It significant and we can reject the null.

c) LPM_ Partial :

Source | SS df MS Number of obs = 753

-------------+---------------------------------- F(4, 748) = 21.24
Model | 18.8424197 4 4.71060492 Prob > F = 0.0000
Residual | 165.885336 748 .22177184 R-squared = 0.1020
-------------+---------------------------------- Adj R-squared = 0.0972
Total | 184.727756 752 .245648611 Root MSE = .47093

------------------------------------------------------------------------------
inlf | Coef. Std. Err. t P>|t| [95% Conf. Interval]
-------------+----------------------------------------------------------------
kidslt6 | -.1614447 .033384 -4.84 0.000 -.2269822 -.0959072
nwifeinc | -.0032787 .0015411 -2.13 0.034 -.006304 -.0002534
expersq | .0004303 .0000709 6.07 0.000 .0002911 .0005696
city | .0074443 .0369179 0.20 0.840 -.0650307 .0799193
_cons | .5913677 .0430152 13.75 0.000 .5069228 .6758126
------------------------------------------------------------------------------

d) H0: Bage=Beduc=Bexper=0

HA: Null is not true.

We must use the F test with the restricted and unrestricted models.

The F-stat is 21.24 which is greater than the critical value 5.6281 for the
5% significance level. Hence, we can reject the null and say that we cannot
omit these variables because they are significant.

e)
. regress inlf

Source | SS df MS Number of obs = 753

-------------+---------------------------------- F(0, 752) = 0.00
Model | 0 0 . Prob > F = .
Residual | 184.727756 752 .245648611 R-squared = 0.0000
-------------+---------------------------------- Adj R-squared = 0.0000
Total | 184.727756 752 .245648611 Root MSE = .49563

------------------------------------------------------------------------------
inlf | Coef. Std. Err. t P>|t| [95% Conf. Interval]
-------------+----------------------------------------------------------------
_cons | .5683931 .0180617 31.47 0.000 .5329357 .6038505
------------------------------------------------------------------------------
f) Out of 753 women in the sample, only 428 are working. This is only
56.8% of all the women which is a small percentage.

g)

The F-test for the first model is 38.05 which is very significant at the 5%
level because it is greater than the critical value and we can reject the null.
The F-test for the second model is 21.24 which is also very significant at
the 5% level.

2.

Source | SS df MS Number of obs = 2,725

-------------+---------------------------------- F(5, 2719) = 30.34
Model | 28.8409942 5 5.76819884 Prob > F = 0.0000
Residual | 516.97552 2,719 .190134432 R-squared = 0.0528
-------------+---------------------------------- Adj R-squared = 0.0511
Total | 545.816514 2,724 .20037317 Root MSE = .43604

------------------------------------------------------------------------------
arrr86 | Coef. Std. Err. t P>|t| [95% Conf. Interval]
-------------+----------------------------------------------------------------
pcnvsq | -.1849672 .0214145 -8.64 0.000 -.2269576 -.1429768
avgsen | .0056962 .0064336 0.89 0.376 -.0069191 .0183115
tottime | -.0024391 .0049636 -0.49 0.623 -.012172 .0072937
ptime86 | -.0230134 .0046167 -4.98 0.000 -.032066 -.0139607
qemp86 | -.0409139 .0053958 -7.58 0.000 -.0514941 -.0303336
_cons | .4314443 .0164706 26.19 0.000 .3991481 .4637406
------------------------------------------------------------------------------

. sum arrr86

Variable | Obs Mean Std. Dev. Min Max

-------------+---------------------------------------------------------
arrr86 | 2,725 .2770642 .4476306 0 1