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In order to account for this endogeneity challenge, we estimated a two-equation technique model working with the STATA routine cmp (for facts, see Roodman 2011). One particular equation modelled the employment (probability) decision suspected of getting endogenous—this was our most important equation of interest—while the other modelled the well being status and integrated the employment indicator on its ideal side. This resulted in a two-equation technique model (see Altonji et al. 2005 for a similar application) that can be consistently and efficiently estimated by restricted data maximum likelihood. The simultaneous equation model permitted us to account for endogeneity, and it incorporated instrumental variable (IV) Heckman selection modelling.

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