*
*  Example 6.1
*  J. Wooldridge, Econometrics of Cross Section and Panel Data
*
*  Note: The sample data files include all required data transformations.
*        However, in many cases we show how these data transformations would
*        be created in RATS from the basic data, as this is something you will
*        need to know how to do in practice.
*
open data mroz.raw
data(format=free,org=columns) 1 428 inlf hours kidslt6 kidsge6 age educ wage repwage $
 hushrs husage huseduc huswage faminc mtr  motheduc fatheduc $
 unem city exper nwifeinc lwage expersq
*
set lwage = log(wage)
set expersq = exper**2
*
*  Obtain residuals from a regression of educ on the exogenous variables
*
linreg educ / resids
# constant exper expersq motheduc fatheduc huseduc
*
* Run OLS with the explanatory variables and the residuals. The t-test on the
* residuals regressor can be read off the regression output.
*
linreg lwage
# constant exper expersq educ resids