zwages1”
Homework #1
A hard copy is due in class on Tuesday, February 9, 2016Thursday February 11, 2016. Late homeworks are not accepted. If you cannot make it to lecture, you should arrange to hand in your homework ahead of time. For data, you must use the August 2015 CPS data set.

Several questions refer to the Basic Sample: persons whose age is in the 21-27 (inclusive) range, who are working at least 40 hours per week.
1. Consider the Basic Sample only. Create standardizations (z-scores) of for the variables: wages, age, education, and hours. Display the resulting histograms and statistics next to the unstandardized versions. Describe the main ways the pairs of graphs are similar, and the main ways they are different.
2. Start with the entire data set and construct the variable “zwages1” by (i) restricting your sample to the Basic Sample, and then (ii) forming the z-scores of the wages. Now start with the entire data set and construct “zwages2” by (i) forming the z-scores of the wages, and then (ii) restricting your sample to the Basic Sample. Compare the resulting histogram and statistics, and compare the first observation in the two cases. Explain the differences.
3. Determine the following proportions of persons in the Basic Sample:
a. Women;
b. Persons making over 50k;
c. Persons who are women making over 50k;
d. Persons who are women or who make over 50k;
e. The proportion of women among the persons making over 50k;
f. The proportion of women who make over 50k;
[Hint:Construct the relevant binary (indicator) variables, and them both, and then use N-way tabulation. Intuitively, you will be calculating Pr[A], Pr[B], Pr[A and B], Pr[A or B], Pr[A|B], and Pr[B|A].]
4. The 2016 federal poverty level for family of size 1 (i.e., just you living alone) is $11,770. For a family of size 2 or 3 it is $15,930 and $20,090 respectively. Construct a graph that displays the breakdown of people’s wages (ignoring other possible sources of income) in terms of positive and negative percentages (or proportions) above or below the poverty level for a family of size 1. Assuming that each individual is the sole earner for their family, do the same for families of size 2 and 3 (i.e., assume each individual is the sole earner for a family of the appropriate size). Repeat this, but for the Basic Sample only.
5. Restrict your sample to people working at least 40 hours per week (no other constraints). Construct and compare the “histogram and statistics” of wages of 20-25 year olds, 26-35 year olds, 36-45 year olds, 46 – 55 year olds, 56 – 65 year olds, 66 – 70 year olds, and 71+ year olds. What do you notice about wages? Give a short explanation of what you think accounts for the differences in wages. [Copy and paste your histograms and statistics onto a single sheet of paper.]

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2015 AUGUST CPS CODE BOOK
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STATE
Geography-FIPS state code

With the following Ranges:
1 AL
2 AK
4 AZ
5 AR
6 CA
8 CO
9 CT
10 DE
11 DC
12 FL
13 GA
15 HI
16 ID
17 IL
18 IN
19 IA
20 KS
21 KY
22 LA
23 ME
24 MD
25 MA
26 MI
27 MN
28 MS
29 MO
30 MT
31 NE
32 NV
33 NH
34 NJ
35 NM
36 NY
37 NC
38 ND
39 OH
40 OK
41 OR
42 PA
44 RI
45 SC
46 SD
47 TN
48 TX
49 UT
50 VT
51 VA
53 WA
54 WV
55 WI
56 WY

METROSIZE
Metropolitan Statistical Area Size

With the following Ranges:
0 Not Identified or NonMetropolitan
2 100,000 – 249,999
3 250,000 – 499,999
4 500,000 – 999,999
5 1,000,000 – 2,499,999
6 2,500,000 – 4,999,999
7 5,000,000+

METROAREA
Combined Statistical Area FIPS Code

With the following Ranges:
000 Nonmetropolitan or Not Identified
118 Appleton-Oshkosh-Neenah, WI
176 Chicago-Naperville-Michigan City, IL-IN-WI (part)
178 Cincinnati-Middletown-Wilmington, OH-KY-IN (part)
184 Cleveland-Akron-Elyria, OH (part)
206 Dallas-Fort Worth, TX (part)
212 Dayton-Springfield-Greenville, OH (Part)
216 Denver-Aurora-Boulder, CO
220 Detroit-Warren-Flint, MI
260 Fresno-Madera, CA
266 Grand Rapids-Muskegon-Holland, MI (part)
268 Greensboro-Winston-Salem-High Point, NC (part)
272 Greenville-Anderson-Seneca, SC (part)
288 Houston-Baytown-Huntsville, TX (part)
290 Huntsville-Decatur, AL
294 Indianapolis-Anderson-Columbus, IN (part)
304 Johnson City-Kingsport-Bristol, TN-VA (part)
348 Los Angeles-Long Beach-Riverside, CA
356 Macon-Warner-Robins-Fort Valley, GA (part)
376 Milwaukee-Racine-Waukesha, WI
378 Minneapolis-St. Paul-St. Cloud, MN-WI (part)
408 New York-Newark-Bridgeport, NY-NJ-CT-PA (part)
428 Philadelphia-Camden-Vineland, PA-NJ-DE-MD (part)
450 Raleigh-Durham-Cary, NC (part)
472 Sacramento–Arden-Arcade–Truckee, CA-NV (part)
482 Salt Lake City-Ogden-Clearfield, UT (part)
488 San Jose-San Francisco-Oakland, CA
500 Seattle-Tacoma-Olympia, WA
548 Washington-Baltimore-Northern Virginia, DC-MD-VA-WV (part)
715 Boston-Worchester-Manchester, MS-NH-CT-ME (part)
720 Bridgeport-New Haven-Stamford, CT

HOUSEHOLD
Household-total # of members

With the following Ranges:
0:16 Range

EDUCATION
Demographics-highest level of school completed

With the following Ranges:
-1 Not in Universe
31 Less Than 1st Grade
32 1st,2nd,3rd Or 4th Grade
33 5th Or 6th Grade
34 7th Or 8th Grade
35 9th Grade
36 10th Grade
37 11th Grade
38 12th Grade No Diploma
39 High School Grad-Diploma Or Equiv (ged)
40 Some College But No Degree
41 Associate Degree-Occupational/Vocationl
42 Associate Deg.-Academic Program
43 Bachelor’s Degree(ex:ba,ab,bs)
44 MASTER’S DEGREE(EX:MA,MS,MEng,MEd,MSW)
45 Professional School Deg(ex:md,dds,dvm)
46 DOCTORATE DEGREE(EX:PhD,EdD)

HOURS
Labor Force-# hours actually worked at all jobs

With the following Ranges:
-1 Not in Universe
0:198 Range

HISPANIC
Demographics- hispanic/non-hispanic origin

With the following Ranges:
1 Hispanic
2 Non-Hispanic

MARITAL
Demographics-marital status

With the following Ranges:
-1 Not in Universe
1 Married – Spouse Present
2 Married-Spouse Absent
3 Widowed
4 Divorced
5 Separated
6 Never Married

SEX
Demographics-sex

With the following Ranges:
1 Male
2 Female

ASIAN
Demographics Detailed Asian Subgroup

With the following Ranges:
-1 Not in Universe
1 Asian Indian
2 Chinese
3 Filipino
4 Japanese
5 Korean
6 Vietnamese
7 Other Asian

AGE
Demographics – age topcoded at 85, 90 or 80 (see full description)

With the following Ranges:
0:90 Range

RACE
Demographics- race of respondent

With the following Ranges:
01 White only
02 Black only
03 American Indian, Alaskan Native Only
04 Asian only
05 Hawaiian/Pacific Islander Only
06 White-Black
07 White-AI
08 White-Asian
09 White-HP
10 Black-AI
11 Black-Asian
12 Black-HP
13 AI-Asian
14 AI-HP
15 Asian-HP
16 W-B-AI
17 W-B-A
18 W-B-HP
19 W-AI-A
20 W-AI-HP
21 W-A-HP
22 B-AI-A
23 W-B-AI-A
24 W-AI-A-HP
25 Other 3 Race Combinations
26 Other 4 and 5 Race Combinations

WEEKLYWAGES
Earnings-weekly earnings,amount-recode

With the following Ranges:
-1 In Universe, Met No Conditions To Assign
0.0:2884.61 Range