Excercise #1_answers.pdf - Exercise#1 Measuring the gender...

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1 Exercise #1. Measuring the gender gap in earnings in the U.S. Do men earn more than women in the labor market? Social norms and laws governing gender discrimination in the workplace have changed substantially in the U.S. Is the gender gap in earnings stable or has it diminish over time? Use the given data set ( CPS92_08.dta ) and answer the following questions. Questions a. Compute the sample mean for average hourly earnings (AHE) in 1992 and in 2008. Construct a 95% confidence interval for the population means of AHE in 1992 and in 2008 and the change between 1992 and 2008. Table 1. Average Hourly Earnings (Nominal) Mean SE of mean 95% Confidence Interval AHE 1992 11.63 0.064 11.50-11.75 AHE 2008 18.98 0.115 18.75-19.20 Difference SE of difference 95% Confidence Interval AHE 2008 – AHE 1992 7.35 0.132 7.09-7.61 b. In 2008, the value of the Consumer Price Index (CPI) was 215.303. In 1992, the value of the CPI was 140.3. Repeat (a) but use AHE measured in real 2008 dollars ($2008); that is, adjust the 1992 data for the price inflation that occurred between 1992 and 2008.
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