Methods for Analyzing Schooling Choice with Household Survey Data

by Lee A. Lillard, Elizabeth M. King

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Much recent research has focused on different household choices such as family size, schooling, and labor supply. With judicious use of micro data from household surveys, these studies have greatly contributed to the understanding of demographic change and economic behavior. In this Note, the authors develop a method that offers a flexible approach to issues that arise from these analyses. Various applications of ordered polychotomous models to various economic behavior are found in existing literature. The authors offer this general approach as a method for analyzing household choices, such as child schooling, when family survey data are available. It provides a more efficient and flexible alternative to previously used techniques in utilizing censored data and in treating nonnormal discrete choices. The application to data in Section III illustrates levels of analyses that can be obtained from the model. In addition to these, the simulation procedure may be used to assess the effects of specific regressors on schooling outcomes under counterfactual situations.

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