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ECO 395K

Oettinger

Option III M.A. Labor Economics

Spring 2023

Empirical Exercise #1 – due at 2:00 PM on Wednesday, March 8

Go to IPUMS web page (www.ipums.org) and extract data from the 2021 American Community Survey (ACS) Public Use Microdata Sample. When creating your extract,     limit your sample to observations on individuals aged 25-54 who live in the state that I     have assigned for your analysis (shown on the last page below).  Your data extract should include the following IPUMS variables: STATEFIP, NCHILD, NCHLT5, AGE, SEX,     MARST, RACE, HISPAN, EDUC, OCC, CLASSWKR, WKSWORK1, UHRSWORK,   INCWAGE, and FTOTINC.

Read the IPUMS documentation to see what each of these variables measures and how each is coded. Next, create the following variables in Stata (or your preferred statistical software package, if different):

•   Age and age squared;

•   A dummy variable for “Hispanic”;

•   Dummy variables for “Black” and “Asian”;

•   A dummy variable for “currently married”;

•   Dummy variables for each of the following educational attainment categories: (i) Completed less than 12 years of schooling; (ii) Completed exactly 12 years of schooling; (iii) Completed 1-2 years of college; (iv) Completed exactly 4 years of college; and (v) Completed 5+ years of college;

•   Dummy variables for each of the 12 major occupation categories (i.e., “Management, Business, Financial Occupations”; “Computer, Engineering, and Science Occupations”; “Education, Legal, Community Service, Arts, and Media Occupations”; etc.);

•   A dummy variable for “public sector worker”;

•   A dummy variable for “wage worker last year” that equals 1 if the individual worked 1 or more weeks last year and was not self-employed and was not an unpaid worker, and equals 0 otherwise;

•   An “annual hours worked” variable, computed as usual hours worked per week multiplied by the individual’s weeks worked last year;

•   A “nonlabor income” variable, calculated as total family income minus own wage income;

•   An “hourly wage” variable, calculated as wage income last year divided by annual hours worked;

•   The natural logs of annual hours worked, nonlabor income, and the hourly wage.

When you have completed these tasks, please turn in: (i) your Stata (or other software) code, (ii) the Stata (or other software) output for parts (a) and (b) of the problem, and (iii) your answers to part (c).

You should freely share information with your classmates any expertise that you acquire regarding topics such as: how to download the raw data, how the raw data are coded, appropriate code to create variables and estimate models in Stata, etc.

Assignment of Students to States for the Empirical Assignment