Assignment

Each month, the U.S. Census Bureau and the U.S. Bureau of Labor Statistics conduct the Current Population Survey (CPS), which provides data on labor force characteristics of the population, including the levels of employment, unemployment, and earnings. The dataset, cps92_12.csv posted on Canvas contains data for years 1992 and 2012, for workers age 25-34, and for workers with either a high school diploma or B.A./B.S. as their highest degree. A more detailed description of the data is given in the file CPS92_12_Description.pdf on Canvas. Use these data and R program to answer the following questions (You might find it helpful to look at the sidebar "The Gender Gap of Earnings of College Graduates in the United States" in Section 3.5 (pp. 86-87, on Canvas).

(a) Construct a 95% confidence interval for the population means of ahe (average hourly earnings) in 1992 and 2012.

(b) Construct a 95% confidence interval for the change in the population mean of ahe in 1992 and 2012.

(c) In 2012, the value of the Consumer Price Index (CPI) was 229.6. In 1992, the value of the CPI was 140.3. Construct a 95% confidence interval for the population means of rahe (real average hourly earnings) in 1992 and 2012, measured in real 2012 dollars ($2012); That is, adjust the 1992 data for the price inflation that occurred between 1992 and 2012 (Hint: You need to create a new variable adjusted by cpi in 2012/cpi in 1992, i.e. observations in 1992 should be multiplied by :36 while the observations in 2012 will be the same as before because base year is 2012; refer to the HO_5_CreateNewVariable).

(d) Construct a 95% confidence interval for the change in the population mean of rahe (real average hourly earnings) in 1992 and 2012, measured in real 2012 dollars ($2012).

(e) If you were interested in the change in worker's purchasing power from 1992 to 2012, would you use the results from (b) or (d)? Explain.

(f) Using the data for 2012, construct a 95% confidence interval for the mean of rahe for high school graduates.

(g) Using the 1992 data expressed in $2012, construct a 95% confidence interval for the mean of rahe for high school graduates.

(h) Did real (inflation-adjusted) wages of high school graduates increase from 1992 to 2012? To answer the queston, construct a 95% confidence interval for the change in the population mean of rahe in 1992 and 2012.

Attachment:- Attachments.rar