Econometrics 'A' project for MSc Economics degree course Essay

Econometrics 'A' project for MSc Economics degree course - Essay Example However, in this research we are only interested in examining the effect of total experience and attainment of a specific level of education on the wage differential between the sexes. Total experience was obtained by adding ‘months since hire’ and ‘previous Experience’ This study utilized secondary sources for data collection. The use of secondary data is useful because it is cost efficient and saves time for the independent researcher (Glaser, 1963; Hyman, 1978; Hayashi, 2000). The independent researcher has limited financial resources because he or she works alone. Such researchers are usually professionals who attempt to research some significant social problem on a part-time basis. Description of the Research Design A two-step attempt was made to discover if the income of professional females increases at the same rate as that of males with comparable education as the experience increase. During the first step the existence and strength of a relationshi p between salary and experience for male and female professionals with a given university degree in a specific job were researched using correlational methodology. During the second step a comparison was made between the incomes of males and females with the same experience. Attainment of an educational degree was held constant for each given professional position. The correlational research method was selected as the primary methodology because of its ability to discover relationships among logical variables (Wooldridge, 2008). Research Hypothesis It appears that there is a lack of congruence in the literature in establishing an association between level of income, experience and gender, and also a lack of significant research efforts towards establishing a link between income and experience by gender identification, therefore, the hypothesis was stated as a null hypothesis (Albrect et al., 2003; Atkinson et al., 2003; Blau et al., 2006). Locke, Spirduso, and Silverman (1987) recom mend that if one researches a question where no well-established theory exists one should use the format of the null-hypothesis. There will be no difference in the salary of males and females at given experience when other factors, such as academic degree (bachelor's, master's, or associate degree), and professional position are held constant. Variables The variables in this study's regression analysis are as follows: Male/female relationship (the numerical value of 0 was assigned to the male and 1 to the female variable), education and experience were considered indepen ­dent variables; annual salary depends on the aforementioned variables and therefore is considered the dependent vari ­able. A dummy variable was introduced by multiplying experience by the value of the male/female relationship for the reason mentioned below. The first independent variable, that is, male/female, was selected for its possible effect on the difference in earnings between the sexes. The second inde pendent variable, experience (in months), was chosen for its possible effect on the earning of any individual. The third indepen ­dent variable, education, allows the individual to enter a given professional position. And finally the fourth independent variable, the dummy variable, was supposed to trigger possible changes over time, that is, the closing of the male/female