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# Salary and Gender - Testing for Discrimination

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Salary and Gender - Testing for Discrimination
The starting salary (Y) is related to years of education (X), previous work experience (E) and hiring time (T) for 93 employees of a bank. Suppose that you have been hired by a government agency to investigate whether there has been any salary discrimination on the basis of gender.
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Salary and Gender - Testing for Discrimination
The starting salary (Y) is related to years of education (X), previous work experience (E) and hiring time (T) for 93 employees of a bank. Suppose that you have been hired by a government agency to investigate whether there has been any salary discrimination on the basis of gender.
In the attached excel file the first 61 observations are for female employees and the last 32 observations are for male employees. Let Gt be a gender dummy variable that is equal to 1 for the males and 0 for the females.
(a) Estimate the model Yt = &#946;1 + &#948;Gt + et .
&#12288; Coefficients SE t Stat P-value
Intercept 5,138.852 76.255 67.390 0.000
G 818.023 129.997 6.293 0.000
From the OLS report in EXCEL, we can write the model into:
Yt = 5,138.852 + 818.023 Gt + et .
(1) How would you test whether male salaries are ...

#### Solution Summary

Dummy Variable Analysis is demonstrated.

\$2.49