I am trying to build a model in SEM, where 3 categorical demographic variables (education (4 levels), age (5 levels), and gender (2 levels)) should be included as control variables. I plan to use SPSS AMOS. However, up,o,n reading some documentations of AMOS, it does not seem AMOS can handle categorical demographic variables in SEM. Is this true? If not (AMOS does do categorical control variables), can someone show me how to do it or point me to the right references/resources? If yes (AMOS does not do categorical control variables), can you please suggest alternative software (ex: does SAS do this?)? Thanks!
No, it's not true. You enter them as dummy variables, just as you would if you wanted to control for them in regression.
Unless you want to treat the variables as ordinal - in which case you have the same problem you have in regression - either treat them as (unordered) categorical, or treat them as continuous.