Lutz Hendricks - UNC - Department of Economics

CPS Earnings Statistics

Purpose: Get students started with data handling.

Goal: Using Current Population Survey data (from IPUMS), construct measures of wage dispersion over time.

Getting the data

I downloaded the data for you (from IPUMS).

A compressed file can be downloaded from here. It contains:

  1. The data in Stata format (extension dta).
  2. Codebooks (extension cbk.txt or xml).
  3. Program files for reading the data using various stats packages (extensions sps, sas, do).

Your assignment

For each year:

  1. Construct measures of wage dispersion: standard deviation of log wages; 90/10, 90/50 and 50/10 ratios.

    1. also break this down by schooling (high school dropouts, high school graduates, college dropouts, college graduates)
    2. graph these results
  2. 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.

Things to think about

  1. 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.

  2. The coding of weeks worked changes over time.

  3. Earnings are top coded (you don’t have to deal with this complication for this exercise).