Question: The PSID1976 data originating from Mroz (1987) are used in many econometrics texts, including Greene (2003) and Wooldridge (2002). Following Greene (2003, p. 681):
(a) Fit a probit model for labor force participation using the regressors age, age squared, family income, education, and a factor indicating the presence of children. (The factor needs to be constructed from the available information.)
(b) Reestimate the model assuming that different equations apply to women with and without children.
(c) Perform a likelihood ratio test to check whether the more general model is really needed.