Assignment 2
An Econometric Study of the Earnings of a Group of Immigrants in a
Canadian Province using Microdata from the 2011 National Household Survey
Gilles Grenier, Fall 2015
Directions
This assignment is due on December 7, 2015. If you want, you can show me in advance an
interim report of your programming and preliminary econometric results.
This assignment is a continuation of the first one and you must use the same group of
immigrants and the same province that have already been assigned to you. You must estimate,
with the 2011 National Household Survey microdata, earnings regressions showing entry effects
and assimilation effects. We use a modified version of the model seen in class that takes into
account the fact that we consider two groups of immigrants. Because there is only one
cross-section, there are no cohort effects. The model is the following:
ln y = X β + α IO + γ IG
+ δ (YSM × I) + u
where
ln y = natural logarithm of annual earnings (labour income);
X = vector of personal characteristics (age, age squared, schooling, location of studies, marital
status, weeks worked, indicator for full time or part time work);
β = vector of regression coefficients;
α = regression coefficient indicating the entry effect for other (than your group) immigrants;
IO = dummy variable taking the value 1 for other immigrants and the value 0 otherwise;
γ = regression coefficient indicating the entry effect for your group of immigrant;
IG = dummy variable taking the value 1 for your group of immigrants and the value 0 otherwise;
δ = regression coefficient indicating the assimilation effect for immigrants (in this specification,
assumed to be the same for your group and for other immigrants);
YSM = number of years since migration of the immigrants;
I = 1 for all immigrants, =0 for non-immigrants;
u = regression error term.
1
Your data must include the Canadian born people, the immigrants of your group and the other
immigrants in the province that has been assigned to you. Your analysis must be done with people
aged 20 to 64, with positive wages and separately for men and women.
The assignment will take the form of an essay with a title, an introduction, a development of the
subject (including regression tables), a brief conclusion and bibliographical references. The entire
paper should have between 1500 and 2000 words, excluding the tables and the bibliographical
references. You will be noted in particular on your ability to write your ideas clearly. More
precisely, your essay will have the following structure (which is a standard structure for this kind
of empirical study):
1. Introduction. The introduction motivates the topic, it says why it is interesting. It
introduces the particular group of immigrants to be analysed. It also puts the study in its
context by referring to previous studies that are related to yours. The last paragraph of the
introduction indicates what is going to be done in each of the following sections. The
introduction must be short.
2. Methodology and data. In this section, you present and motivate the regression model
to be used, i.e., the one described in the equation above. You also describe the data source,
the chosen sample and the variables. The information should be clear enough to allow a
person who reads the paper to replicate your work.
3. Analysis of the results. This is the most important and probably the longest section of
your paper. You have to present and discuss at least two tables: (1) a table with descriptive
statistics; (2) one table with regression results. You must provide an analysis of your
results. In particular, for the regression, you must discuss the entry and assimilation effects.
From those effects, you can calculate the number of years to reach equality. You must also
interpret briefly the coefficients of other key variables. You are also encouraged, as an
option, to present a model which is specified slightly differently from the one presented
above (some suggestions will be made in class).
4. Conclusion. The conclusion, which is relatively short, summarises the major findings. It
can also discuss the policy implications of the results and make suggestions for further
research on the same topic.
References. A list of all the bibliographical references that are cited in the text, presented
according to the standard criteria.
An example of a computer program will be given in class to help you do the assignment. In
your paper, you must edit the stata output to present it in a format that is suitable for a table in a
research paper (as will be explained in class).
Source SS df MS Number of obs = 24520
F( 14, 24505) = 1266.49
Model 9842.04254 14 703.003039 Prob > F = 0.0000
Residual 13602.241 24505 0.555080228 R-squared = 0.4198
Adj R-squared = 0.4195
Total 23444.2835 24519 0.956168014 Root MSE = .74504
log of annual wages Coefficient Standard Error t-ratio P>t [95% Conf. Interval]
age 0.0837791 0.0031218 26.84 0 0.0776601 0.089898
the square of age -0.0008819 0.0000368 -23.94 0 -0.0009541 -0.0008097
no degree -0.095124 0.0185012 -5.14 0 -0.1313876 -0.0588605
trades, apprenticeship, college 0.104847 0.0124774 8.4 0 0.0803907 0.1293034
university below bachelor 0.15882 0.0229547 6.92 0 0.1138274 0.2038126
school undergraduate bachelor 0.2681562 0.0150034 17.87 0 0.2387486 0.2975638
university, masters or doctorate 0.3844498 0.0217093 17.71 0 0.3418982 0.4270013
post-secondary schooling outside Canada -0.0720943 0.0196938 -3.66 0 -0.1106953 -0.0334932
marital status 0.1665092 0.0113916 14.62 0 0.144181 0.1888374
Weeks worked in 2010, in logs 0.6811222 0.0107905 63.12 0 0.6599722 0.7022721
part time work -0.9118209 0.0160125 -56.94 0 -0.9432063 -0.8804354
Other immigrants -0.3682281 0.0210213 -17.52 0 -0.4094312 -0.327025
immigrants from United Kingdom -0.3709285 0.0361739 -10.25 0 -0.4418316 -0.3000255
years since migration 0.0092906 0.0007549 12.31 0 0.007811 0.0107702
regression controlled differences 6.084629 0.068432 88.91 0 5.950498 6.21876