Shad 3 - Weekly Earnings and Education

______

Name

Shad 3 - Weekly Earnings and Education

I attempt to show you the relationship between the level of human capital and earnings through lectures and the text. I believe it would be helpful to examine the relationship on your own. Go to the Ferret site and once again select the March CPS for 2009. On the "Ferret Select Variables" screen please select the following five variables for use in this exercise.

Current job, Earnings, usual weekly amount, A_GRSWK

Current job, Full/part-time work status - Person, PMWKSTAT

Demographic, Age Recode Persons 15+ years, AGE1

Demographic, Educational Attainment, A_HGA

Demographic, Sex, A_SEX

We are going to examine the weekly earnings of groups of people. Let us exclude those people with no weekly earnings. In the "Select Variable Values" screen for weekly earnings choose the values 1 and 2,885 for the range. This will give us all people with earnings through the top weekly value of $2,885.[1] We will confine our analysis to full-time workers, so choose people with a "Current job, Full/part-time work status person" value of 2. For our first analysis we will examine people that are ages 25-29 so for the "Demographic, Age Recode" variable choose chose category 6 for ages 25-29. Let us start with "Demographic, Educational Attainment" for college graduates (value 43 only) and for both sexes in the Demographic, Sex variable.

Go to the Step 2, Data Basket/Download/Make A Table tab at the top and then click.on Make a Table. Notice that Ferret has the average (mean) earnings already calculated for you. You have limited the sample to college graduates who are 25-29 and working full time. There is no need t click and drag these three variables over to the table, just A_GRSWK.

1. What is the mean weekly earnings for 25-29 year-old college graduates who worked full-time?

Clear your results (the spreadsheet tab at the top with a bit of a green border.) Click and drag both the earnings and the sex variable into the spreadsheet and click “Go Get Data.”

1. What is the mean weekly earnings for 25-29 year-old MALE college graduates who worked full-time?

1. Repeat the exercise for females. What is the mean weekly earnings for 25-29 year-old FEMALE college graduates who worked full-time?

You can do the following analysis for just one gender. Choose either male or female and proceed.

Gender Chosen: ______

Go back and select the gender of your choice on the "Select Variable Values" screen and redo the exercise for all of the age groups between 25 and 64. Place your results below.

1. Mean Weekly Earnings

of Male College Graduates

1. Graph your answers below

Weekly

Earnings

2535455560

1. Go back to the "Select Variable Values" Screen. Using the same gender as above select 25 to 29. Fill in the table.

1. What relationship do you see between education and earnings?

1. Do one other analysis of your own choosing to examine the impact of education for different groups. Discuss what you find.

[1] You might wonder where the value $2,885 comes from as a few people do make more than that in a week. If you multiply the value by 52 weeks you will see that this works out to annual earnings of $150.020, or approximately $150,000. The survey does not record annual incomes over $150,000 as specific numbers, but rather "top codes" them as “$150,000 and above.” This is done to preserve the anonymity of respondents in the sample for those extremely high incomes.