We obtain an LM test for the random effects probit model. In the natural parameterization of the model the necessary derivatives are identically zero under the null hypothesis. After a reparameterization, the feasible LM test is based on generalized residuals.

This paper examine Lilien’s sectoral shifts hypothesis for Japan for different age cohorts. Previous studies of the sectoral shifts hypothesis for Japan have for the most part concentrated on the relationship between aggregate unemployment and sectoral shifts, and are typically not supportive...