The 1995/1996 Household Income, Expenditure - (PDF, 101 mb ...

IV.IS
the benchmark from which to measure changes in response probability given a
change in one or more of the representative individual's characteristics (X n ).
Such a representative individual is a theoretical person constructed from
various average sample characteristics arbitrarily determined by the chosen
numeraire. The important point is that this theoretical representative
individual has an overall index probability of being a wage earner of -.2021.
The signs (positive or negative) on the coefficients of Table IV.3 indicate
whether a given characteristic will increase or decrease the overall index
probability of response. The change in the overall response index due to
altering one characteristics is given by
The indices of Table IV.3a were calculated by determining R* at each of the Xu
for the reference (which is the intercept minus the effect of the four
continuous variables), performing the remaining calculations in the parentheses
above, multiplying the resulting value by 13 n and adding this value to R*. For
example, if a person differed from the representative individual in one aspect,
that he came from Cairo, the probability that he would be a wage earner
would rise from -.2021 to .1426, an increase of 170%. If the individual was a
man rather than a woman, his response propensity would be 141% higher than
the reference, and so on.
IV.G Human Capital Regressions
This final section presents wage regression coefficients from both the
1990/1991 and the 1995/1996 HIECS samples. In earlier regressions using the
recent data set, the coefficient on the inverse of Mill's ratio, A, was
statistically significant but close to 0.00. The interpretation is that including
information about the probability of being a "formal sector" employee on the
right hand side of a level wage equation was meaningful. Before concluding
that the fact of earning a wage is a statistically significant proxy for labor
market formality, however, more refinements must be made to the definition of
"formality." This might entail excluding and including various cases where
appropriate using, perhaps, factor analysis. It is hoped that the method
presented above provided a point of departure for future research into the
structure of the Egyptian labor market.
Table IVA lists the coefficients of wage incomes regressed on various
human capital attributes. along with their asymptotic t values. These
characteristics are sex, age, education level. marital status, type of worker,
occupation and economic activity for both surveys. The numbers are in £E,
and generally the coefficient can be interpreted as the prevailing value for
that labor market "quality," all other qualities held constant. No statements
are made about temporal comparisons yet, either for the overall model or for
individual coefficients; the results are shown side-by-side merely for
convenience. The t statistic tests the null hypothesis that the individual
coefficient equals 0.00 - the reader would normally reject the null if the t
statistic is greater than or equal to 2.00, and conclude that the coefficient is
statistically significant at (greater than) a 99% confidence level. Many of the