A Subsample from the Current Population Survey Is Taken, on Weekly

question 16

Essay

A subsample from the Current Population Survey is taken, on weekly earnings of individuals, their age, and their gender. You have read in the news that women make 70 cents to the $1 that men earn. To test this hypothesis, you first regress earnings on a constant and a binary variable, which takes on a value of 1 for females and is 0 otherwise. The results were: $\widehat { E a m }$
= 570.70 - 170.72 × Female, $R ^ { 2 }$ =0.084, SER = 282.12.
(a)There are 850 females in your sample and 894 males. What are the mean earnings of males and females in this sample? What is the percentage of average female income to male income?
(b)You decide to control for age (in years)in your regression results because older people, up to a point, earn more on average than younger people. This regression output is as follows: $\widehat { E a m }$
= 323.70 - 169.78 × Female + 5.15 × Age, $R ^ { 2 }$ =0.135, SER = 274.45.
Interpret these results carefully. How much, on average, does a 40-year-old female make per year in your sample? What about a 20-year-old male? Does this represent stronger evidence of discrimination against females?

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Definitions:

Stages

refers to distinct phases or periods in a process of development or a sequence of events.

Freud's Theory

refers to Sigmund Freud's psychoanalytic theory, which emphasizes unconscious motivations and conflicts as drivers of human behavior.

Castration Anxiety

A concept in Freudian psychoanalysis that refers to a child's fear of losing his genitals, influencing the development of gender identity and roles.

Little Boys' Fears

A broad term that could refer to common anxieties or phobias experienced during childhood, particularly among young boys, such as fear of the dark, strangers, or separation from parents.