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Econometric flexibility in microsimulation: An age-centred regression approach

  1. John Sabelhaus  Is a corresponding author
  2. Lina Walker
  1. University of Maryland, United States
  2. Investment Company Institute, United States
  3. Public Policy Institute, AARP, United States
Research article
Volume 2(2) Autumn 2009
Cite this article as: J. Sabelhaus, L. Walker; 2009; Econometric flexibility in microsimulation: An age-centred regression approach; International Journal of Microsimulation; 2(2); 1-14. doi: 10.34196/ijm.00013
4 figures and 3 tables

Figures

Figure 1
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Marginal effect of lagged LFP on labour force participation comparing single-equation and age-centred regressions men and women, ages 25–61.
Figure 2
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Marginal effect of being married on part-time hours worked comparing single-equation and age-centred regressions men and women, ages 25–61.
Figure 3
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Mean predicted labour force participation comparing single-equation and age-centred regressions men and women, ages 25–61.
Figure 4
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Mean expected part-time hours comparing single-equation and age-centred regressions men and women, ages 25–61.

Tables

Table 1
Regression results using single equation with linear age term, men and women.
  Men Women
Covariate Pr(LFP = 1) Pr(FT = 1) PT Hours Pr(LFP = 1) Pr(FT = 1) PT Hours
Lagged Labour Force Participation 4.082     4.361    
(0.012)**     (0.008)**    
Married 0.166 0.822 0.236 −0.525 −0.708 −0.371
(0.012)** (0.009)** (0.015)** (0.009)** (0.006)** (0.010)**
Age of Person −0.021 −0.002 −0.011 −0.004 0.012 0.013
(0.001)** (0.001)** (0.001)** (0.001)** (0.000)** (0.001)**
Receiving Social Security Income −2.081 −2.243 −1.218 −1.085 −1.110 −0.606
(0.026)** (0.035)** (0.042)** (0.020)** (0.022)** (0.025)**
High School Education 0.111 0.552 0.111 0.398 0.299 0.101
(0.015)** (0.012)** (0.019)** (0.011)** (0.009)** (0.012)**
Some College Education −0.049 0.491 −0.074 0.482 0.325 0.093
(0.017)** (0.013)** (0.022)** (0.013)** (0.010)** (0.014)**
College Education 0.241 0.646 −0.116 0.637 0.490 0.071
(0.016)** (0.013)** (0.021)** (0.013)** (0.010)** (0.014)**
Number of Children Under 6 Years       −0.481 −0.516 −0.299
      (0.008)** (0.006)** (0.007)**
Birth Year: 1920–1929 0.208 0.129 0.074 0.175 0.078 0.055
(0.042)** (0.041)** (0.066) (0.032)** (0.033)* (0.045)
Birth Year: 1930–1939 0.376 0.202 0.073 0.422 0.157 0.185
(0.041)** (0.041)** (0.064) (0.032)** (0.033)** (0.044)**
Birth Year: 1940–1949 0.392 0.331 0.178 0.64 0.347 0.337
(0.042)** (0.042)** (0.065)** (0.032)** (0.033)** (0.044)**
Birth Year: 1950–1959 0.341 0.293 0.151 0.831 0.543 0.547
(0.043)** (0.042)** (0.068)* (0.034)** (0.033)** (0.045)**
Birth Year: 1960–1969 0.147 0.266 0.068 0.863 0.700 0.660
(0.046)** (0.044)** (0.070) (0.035)** (0.034)** (0.046)**
Birth Year: 1970–1979 −0.001 0.115 0.002 0.744 0.732 0.711
(0.052) (0.047)* (0.074) (0.040)** (0.036)** (0.049)**
Constant −0.443 1.125   −2.169 0.152  
(0.063)** (0.056)**   (0.048)** (0.041)**  
Observations 1,034,541 9,44,231 86,049 1,113,085 7,82,972 2,54,685

  1. Notes: (i) Models denoted by Pr(LFP = 1) – labour force participation; Pr(FT = 1) –full-time or part-time work; PT Hours –part-time hours for those working part-time. (ii) Robust standard errors italicised and in parentheses.

  2. *

    significant at 5%.

  3. **

    significant at 1%.

Table 2a
Regression results using age centring, men ages 30 and 55.
  Men, Age 30 Men, Age 55
Covariate Pr(LFP = 1) Pr(FT = 1) PT Hours Pr(LFP = 1) Pr(FT = 1) PT Hours
Lagged Labour Force Participation 3.451     4.594    
(0.022)**     (0.025)**    
Married −0.043 0.793 0.226 0.335 0.562 0.091
(0.018)* (0.014)** (0.024)** (0.028)** (0.022)** (0.036)*
Age of Person 0.046 0.064 0.028 −0.123 −0.089 −0.062
(0.004)** (0.003)** (0.005)** (0.005)** (0.004)** (0.006)**
Receiving Social Security Income −1.687 −1.905 −1.211 −2.293 −2.555 −1.248
(0.052)** (0.075)** (0.090)** (0.050)** (0.067)** (0.068)**
High School Education −0.088 0.617 0.230 0.152 0.360 0.012
(0.026)** (0.021)** (0.034)** (0.030)** (0.024)** (0.039)
Some College Education −0.364 0.475 −0.060 0.123 0.371 −0.078
(0.028)** (0.022)** (0.036)** (0.037)** (0.029)** (0.047)
College Education −0.043 0.536 −0.248 0.464 0.580 0.047
(0.028) (0.022)** (0.035) (0.035) (0.027)** (0.046)
Birth Year: 1920–1929       −0.065 −0.180 −0.169
      (0.081) (0.067)** (0.103)
Birth Year: 1930–1939       −0.133 −0.382 −0.291
      (0.082) (0.067)** (0.104)**
Birth Year: 1940–1949       −0.277 −0.388 −0.295
      (0.082)** (0.068)** (0.105)**
Birth Year: 1950–1959 0.011 −0.124 −0.008 −0.365 −0.289 −0.232
(0.030) (0.025)** (0.041) (0.098)** (0.080)** (0.126)
Birth Year: 1960–1969 −0.025 −0.058 −0.044      
(0.030) (0.025)* (0.042)      
Birth Year: 1970–1979 −0.001 0.009 −0.035      
(0.034) (0.028) (0.047)      
Constant −1.578 −0.549   5.136 6.613  
(0.117)** (0.094)**   (0.302)** (0.239)**  
Observations 3,08,015 2,90,385 29,024 1,88,934 1,60,656 16,547

  1. Notes: (i) Models denoted by Pr(LFP = 1) – labour force participation; Pr(FT = 1) –full-time or part-time work; PT Hours –part-time hours for those working part-time. (ii) Robust standard errors italicised and in parentheses.

  2. *

    significant at 5%.

  3. **

    significant at 1%.

Table 2b
Regression results using age centring, women ages 30 and 55.
  Women, Age 30 Women, Age 55
Covariate Pr(LFP = 1) Pr(FT = 1) PT Hours Pr(LFP = 1) Pr(FT = 1) PT Hours
Lagged Labour Force Participation 3.717     5.028    
(0.013)**     (0.020)**    
Married −0.534 −0.547 −0.306 −0.535 −0.780 −0.413
(0.015)** (0.011)** (0.016)** (0.022)** (0.016)** (0.024)**
Age of Person 0.029 0.001 0.007 −0.061 −0.020 −0.017
(0.003)** (0.002) (0.003)* (0.004)** (0.003)** (0.004)**
Receiving Social Security Income −0.882 −0.794 −0.515 −1.110 −1.368 −0.718
(0.044)** (0.050)** (0.054)** (0.047)** (0.050)** (0.050)**
High School Education 0.436 0.398 0.107 0.373 0.272 0.076
(0.019)** (0.018)** (0.023)** (0.024)** (0.019)** (0.026)**
Some College Education 0.526 0.454 0.132 0.425 0.290 0.047
(0.021)** (0.019)** (0.024)** (0.031)** (0.022)** (0.032)
College Education 0.700 0.731 0.166 0.598 0.403 0.066
(0.021)** (0.019)** (0.024)** (0.033)** (0.023)** (0.034)
Number of Children Under 6 Years −0.435 −0.584 −0.309 −0.209 −0.201 −0.201
(0.008)** (0.007)** (0.009)** (0.084) (0.060)** (0.085)*
Birth Year: 1920–1929       −0.054 −0.094 −0.034
      (0.062) (0.054) (0.074)
Birth Year: 1930–1939       0.096 −0.095 0.084
      (0.063) (0.054) (0.075)
Birth Year: 1940–1949       0.220 0.135 0.220
      (0.063)** (0.055)* (0.075)**
Birth Year: 1950–1959 0.299 0.255 0.293 0.342 0.244 0.351
(0.020)** (0.016)** (0.022)** (0.076)** (0.062)** (0.086)**
Birth Year: 1960–1969 0.409 0.449 0.455      
(0.021)** (0.017)** (0.023)**      
Birth Year: 1970–1979 0.393 0.499 0.510      
(0.024)** (0.019)** (0.027)**      
Constant −2.408 0.530   0.855 2.184  
(0.086)** (0.067)**   (0.247)** (0.178)**  
Observations 330,794 239,891 81,777 205,062 127,326 40,052

  1. Notes: (i) Models denoted by Pr(LFP = 1) – labour force participation; Pr(FT = 1) –full-time or part-time work; PT Hours –part-time hours for those working part-time. (ii) Robust standard errors italicised and in parentheses.

  2. *

    significant at 5%.

  3. **

    significant at 1%.

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