Estimation of the Wage and Employment Equation Model on Urban Labor Market by the Simultaneous Maximum Likelihood Method

  •  Xiao Du    
  •  Zhang Hao    


This paper estimates wage and employment equation model on urban labor market by the simultaneous maximum likelihood method with CHIP-2002. The results show: human capital, personal ability and father’s education background of a person will affect his/her market wage; Partner’s income and preschool children have a negative effect on female employment probability but have no effect on male employment probability; Female return rate to education is 9.65% and employment elasticity to wage is 1.27; Male return rate to education is 5.93% and employment elasticity to wage is 0.45; Conventional Heckman two step procedure and Probit MLE underestimate the return rate to education and employment elasticity to wage.

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