Sample Selection Analysis of Wage Equation for Women In Ondo State Nigeria

Abstract

The study analysis wage equation for women in Ondo State Nigeria, in other to identify the determinant factors of their wages. Data collected from 250 women heads of households through a multi-stage random system technique were analyzed. In order to deal with the zero wage problem associated with those who did not work, various single – equation models were applied. These include wage equation estimated by ordinary least squares; Heckman two-step sample selection model (Heckit) and Maximum Likelihood Estimation. The test on the sample selection coefficients in the Heckman two-step indicates presence of sample selection bias and that the use of the censored sample model would lead to incorrect estimates. It was discovered that the number of children in the household is negatively related to wage of the women in the region. The study suggested that child bearing by women should be reduced as large family size puts pressure on family income and hours of work.