Quantitatve Methods

Final Examination

Team Members

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December 2008

The final examn is based on 40 points. Part I and Part II have 15 points each. Part III has 10 points.

For the past two decades, there has been increased interest in the wage gapbetween menand women.Common knowledge says that in Europe the gap is decreasing, but as of today, we are not so sure of whether wage differences persist or not. Hence a recent commision has been appointed by EU President Nicolas Sarkozy to analyse more in depth the actual wage differential between men and women.As the quantitative expert of the commision, you have been asked to evaluate the wage gap using on a random sample of 474 employees drawn from all European countries. This sample is representative of all workers employed in Europe.For each employee we have the following information:

Table 1. Variable list and description

Label / Variable Name / Unit / Type
Employee ID / id / - / QL
Gender / female / 0Male
1Female / QL
Minority / minority / 0No
1Yes
9(missing) / QL
Level of education (years) / educ_years / In years / QT
Employee category / job_cat / 00 (Missing)
1Secretary
2Management staff
3Executive officer / QL
Wage / wage / In Euro / QT
Wage at hiring date / ini_wage / In Euro / QT
Months since Hire / months_hire / In months / QT
Past experience (years) / exp / In years / QT

Note:Education level is considered as a quantitative variable

In order to facilitate your empirical investigation, you have decomposed the research into three parts. Part I is designed to report wage differentials. Part II reports the differences between men and women in the relationship between education, experience and wage. Part III seeks to understand the sources of wage differentials.

PartI. Descriptive statistics on wage statistics(15pts)

  1. Importing the file and producing descriptive statitsics. (5pts)
  2. The source file is an excel file which can be found at my webpage
  3. Provide descriptive statitsics for wage, initial wage and years of education
  4. Provide frequency table for gender and job types
  5. Reporting differences in wagesbetween male and female
  6. Test initial wage differential (5pts)
  7. Write out H0 and H1
  8. Carry out test
  9. Conclude
  10. Test actual wage differential (3pts)
  11. Write out H0 and H1
  12. Carry out test
  13. Conclude
  14. Conclusion on part I (2pts)

Part II. Relationship between education, experience and wage (15pts)

  1. Report the effect of a one-year increase in education on initail wage for all employees. (4pts)
  2. Carry out test
  3. Conclusion
  4. Report the effect of a one-month increase in experience in the companyon wage for all employees. (4pts)
  5. Carry out test
  6. Conclusion
  7. Repeat steps 4 and 5 for both men and women (Hint: use the data - spilt file option – compare results) (5pts)
  8. Report comparative results
  9. Conclusion
  10. Conclusion on part II (2pts)

Part III. Understanding the sources of wage differences (10pts)

  1. Is the level of education gender-specific? (3pts)
  2. Write out H0 and H1
  3. Test initial wage differential
  4. Conclusion
  5. Are job typesgender specific? (2pts)
  6. Write out H0 and H1
  7. Test initial wage differential
  8. Conclusion
  9. At equal job, are initial wage differences are due to gender ? (use the data - spilt file option) and concludeon what you think is the basis for the observed differences (education differences, access to job, etc.). (5pts)