Assignment Problem:
Can someone explain the two texts below in layman's term? Like how those two texts are connected, along with some of the terms like opportunity cost? And how the opportunity cost plays a role in both of the texts?
First text:
The key is that the selected sample contains only employed women. Consider two women, Beth and Julie. Beth has no children; Julie has one child. Beth and Julie are otherwise identical. Both can earn $25,000 per year in the labor market. Each must compare the $25,000 benefit to the costs of working. For Beth, the cost of working is forgone leisure. For Julie, it is forgone leisure and the costs (pecuniary and other) of child care. If Beth is just on the margin between working in the labor market or not, then Julie, who has a higher opportunity cost, will decide not to work in the labor market. Instead, Julie will work in "home production," caring for children, and so forth. Thus, on average, women with children who decide to work are women who earn higher wages in the labor market
Second text:
The key lies in that only employed women are included in the sample. Usually, only women who can earn more will go to the labor market, since the opportunity cost of taking care of children at home for women who will be paid higher wages in the labor market is higher. Thus, on average, women with children who decide to work are women who earn higher wages in the labor market. Therefore, there exists the sample selection problem if only employed women are selected, although randomly, in the sample.