Econometrics coursework: Earnings Functions [Stata software need to be used]
Briefing: A big part of the Human Capital Literature focuses on Earnings Functions for studying the effects of investments. An Earnings Function is any regression of individual wage rates or earnings on a vector of personal and other variables thought to influence the wage. Individuals often base their decision about acquiring further qualifications on the grounds of their expectations about higher future earnings.
Using an Educational Attainment and Earnings Functions (EAEF) dataset (I will upload later), you are required to specify and estimate a suitable earnings functions model. Start by explaining the theoretical model you have chosen and justify the choice of variables included in the model by making reference to the literature. The estimated regression output must be interpreted and statistically analysed.
Any problems that emerge must be highlighted and, where possible, addressed. The regression results, together with the description of the data used, must be clearly shown in tables. All variables used must be clearly defined and relevant data sources must be acknowledged. Your earnings equation should be presented in the form of an essay with supporting tables included in the main body of the essay. The essay should not exceed 2 000 words (excluding the content of tables and references).
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