Purpose: Get students started with data handling.
Goal: Using Current Population Survey data (from IPUMS), construct measures of wage dispersion over time.
I downloaded the data for you (from IPUMS).
A compressed file can be downloaded from here. It contains:
For each year:
Construct measures of wage dispersion: standard deviation of log wages; 90/10, 90/50 and 50/10 ratios.
Estimate a Mincer equation using OLS. This involves regressing log wages on schooling dummies and a quartic in experience.
Universe: Men, aged 30–60, who work full time (at least 30 weeks per year) for wages.
Wage = earnings / weeks worked.
The highest degree earned is not available in all years.
How to assign people to school groups?
The standard answer: years of schooling < 12: high school dropout, = 12: high school graduate, 13–15: college dropout, 16+ college graduate.
The coding of weeks worked changes over time.
Earnings are top coded (you don’t have to deal with this complication for this exercise).