I want to estimate log(wages). Most wage estimations suffer from sample selection bias. So I used the two step heckit procedure to correct for it.
The problem is that I get an insignificant inverse Mills ratio in my wage estimation which means i have no sample selection bias.
My exclusions restriction in the first stage probit model are the variables:
- number of children between age 0 to 4
- number of children between age 5 to 7
- number of children between age 8 to 15
- number of children between age 16 to 18
- degree of disease
- degree of disease squared
- non labor income
- marital status
the variables that I use in both regressions are :
- employment experience part time
- employment experience full time
- employment experience part time squared
- employment experience full time squared
- public sector
- level of education
In the wage equation I also have 3 variables that are only available for working people:
- business sector
- number of years employment in company
- number of working people in company
What can I do? Maybe add a variable in the probit equation or something else to get a significant inverse Mills ratio in the wage estimation?