<p>There is no fundamental difference between the choice of occupation and say region. In fact,  there exists a large literature in migration that builds on Roy's model, starting with Borjas (1987).  I'd argue that ideally you'd like to correct for self- selection/ sorting in all choice dimension. In practice this can be hard/ cumbersome/ impossible to do.</p>

<p>Why do we tend to worry about self- selection more in the context of occupations than regions? I suppose it boils down to the fact that everyone had to actively choose an occupation at some point,  whereas we are all born in some region. But,  again,  there is no fundamental difference. </p>

CC BY-SA 4.0
2018-11-01T17:15:04.803Z
An example I just found is here: https://econweb.ucsd.edu/~gdahl/papers/multimarket-roy-model.pdf
chatGPT
CC BY-SA 4.0
2018-10-07T13:31:12.523Z
2018-10-07T13:31:12.523Z
Tsiar
<p>The idea is that education is only a partial measure of ability. If high ability people select into certain occupations because the returns to ability are higher in those occupations, then a simple Mincer regression will conflate the returns to ability and the returns of the occupation.You need to account for the selection effect to get an unbiased estimate of the returns to occupation and education. </p>

CC BY-SA 4.0
2018-08-24T14:33:14.677Z
Ok, but take your phrase "If high ability people select into certain occupations because the returns to ability are higher in those occupations, then a simple Mincer regression will conflate the returns to ability and the returns of the occupation", and replace occupation with other variable. For instance, region, or sector. What's the diference?
chatGPT
CC BY-SA 4.0
2021-06-04T12:58:36.020Z
This is a fair question. In principle, selection could have an effect on hours of work, public or private sector, full time or part time, region, and industry. In practice, the selection effects on some of these may be ignobly small, but I agree that ideally you would want to model the selection into those other decisions as well.
BKay
CC BY-SA 4.0
2018-08-24T13:29:24.440Z
2018-08-24T13:29:24.440Z
BKay
<p>I need help understanding this selection bias problem. I am estimating a mincer equation for a final year project and I was told I need to worry about self-selection bias IN OCCUPATIONS.</p>

<p>My lecturer said that, because wages vary between occupations, and individuals select occupations as a choice, the sample is selected. In that sense, I need to correct this problem. We were taught the Heckman selection model in the context of people deciding whether to work or not. I understand this case, but not the case of occupations. I mean, all is a choice, isn't? In my model I also have hours of work, public or private sector, full time or part time, region, industry, and other common variables. Why do we worry about occupations but not about everything else? I just cannot get my head around this.</p>

<p>Occupations are low, middle and high skill. I'm estimating the returns to education for Australian workers.</p>

<p>I think one thing is important, which is if the variable is included or not in the regression. For example, normally you cannot include a variable
of employment or inactive, because inactive have no wage. This is why, as I understood from the lecture, we need to test for selection. But choice variables that are included, are they a concern? </p>

CC BY-SA 4.0
2018-08-24T12:30:19.857Z
Do you know, for each observation of your sample, what occupation is about?
Alecos Papadopoulos
CC BY-SA 4.0
2018-08-24T13:26:57.747Z
To clarify a bit: What specifically is your primary hypothesis/what are you trying to use the Mincer equation to explain specifically? Returns to education and/or experience?
AndrewC
CC BY-SA 4.0
2018-08-24T14:31:32.380Z
It's low, middle and high skill. I'm estimating the returns to education for Australian workers.
chatGPT
CC BY-SA 4.0
2018-08-24T23:55:12.333Z
You’re right. All is a choice. The lecturer just chose to have you address selectivity in occupation. Why? Because people in the field are interested in the issue. That’s what I understand.
chan1142
<econometrics><selection-bias>
When is self-selection a problem? Mincer equation
chatGPT
# When is self-selection a problem? Mincer equation

(Asked by: username_0 on 2018-08-24)

I need help understanding this selection bias problem. I am estimating a mincer equation for a final year project and I was told I need to worry about self-selection bias IN OCCUPATIONS.

My lecturer said that, because wages vary between occupations, and individuals select occupations as a choice, the sample is selected. In that sense, I need to correct this problem. We were taught the Heckman selection model in the context of people deciding whether to work or not. I understand this case, but not the case of occupations. I mean, all is a choice, isn't? In my model I also have hours of work, public or private sector, full time or part time, region, industry, and other common variables. Why do we worry about occupations but not about everything else? I just cannot get my head around this.

Occupations are low, middle and high skill. I'm estimating the returns to education for Australian workers.

I think one thing is important, which is if the variable is included or not in the regression. For example, normally you cannot include a variable
of employment or inactive, because inactive have no wage. This is why, as I understood from the lecture, we need to test for selection. But choice variables that are included, are they a concern?

**Tags:** econometrics, selection-bias

> **Comments:**
> **username_1**: Do you know, for each observation of your sample, what occupation is about?  
> **username_2**: To clarify a bit: What specifically is your primary hypothesis/what are you trying to use the Mincer equation to explain specifically? Returns to education and/or experience?  
> **username_0**: It's low, middle and high skill. I'm estimating the returns to education for Australian workers.  
> **username_3**: You’re right. All is a choice. The lecturer just chose to have you address selectivity in occupation. Why? Because people in the field are interested in the issue. That’s what I understand.  

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## 2 answers

### Answer by username_4 on 2018-10-07. Score: 2

There is no fundamental difference between the choice of occupation and say region. In fact, there exists a large literature in migration that builds on Roy's model, starting with Borjas (1987). I'd argue that ideally you'd like to correct for self- selection/ sorting in all choice dimension. In practice this can be hard/ cumbersome/ impossible to do.

Why do we tend to worry about self- selection more in the context of occupations than regions? I suppose it boils down to the fact that everyone had to actively choose an occupation at some point, whereas we are all born in some region. But, again, there is no fundamental difference.

> **Comments:**
> **username_0**: An example I just found is here: https://econweb.ucsd.edu/~gdahl/papers/multimarket-roy-model.pdf  

---

### Answer by username_5 on 2018-08-24. Score: 1

The idea is that education is only a partial measure of ability. If high ability people select into certain occupations because the returns to ability are higher in those occupations, then a simple Mincer regression will conflate the returns to ability and the returns of the occupation.You need to account for the selection effect to get an unbiased estimate of the returns to occupation and education.

> **Comments:**
> **username_0**: Ok, but take your phrase "If high ability people select into certain occupations because the returns to ability are higher in those occupations, then a simple Mincer regression will conflate the returns to ability and the returns of the occupation", and replace occupation with other variable. For instance, region, or sector. What's the diference?  
> **username_5**: This is a fair question. In principle, selection could have an effect on hours of work, public or private sector, full time or part time, region, and industry. In practice, the selection effects on some of these may be ignobly small, but I agree that ideally you would want to model the selection into those other decisions as well.  

---

