Hello I have a question about instrument validity in Heckman's selection model. For this purpose, I use the example from Stata itself
Running the above gives us that married and children (as instruments) affect selection into the labor market.
My question is if I run an OLS with wage as the dependent variable, and use all variables as independent variables, then I also get the result that # of children is negatively correlated with wages. Is that a problem? In other words, my concern is that the instrument "children" is directly correlated with wages and not just with selection.
Thanks
Code:
webuse womenwk heckman wage educ age, select(married children educ age)
My question is if I run an OLS with wage as the dependent variable, and use all variables as independent variables, then I also get the result that # of children is negatively correlated with wages. Is that a problem? In other words, my concern is that the instrument "children" is directly correlated with wages and not just with selection.
Code:
reg wage educ age married children
