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Universidad de Chile Facultad de Economa y Negocios

PROBLEM SET 1
Labor Economics Spring 2012 Professors: Dante Contreras & Jaime Ruiz-Tagle. TA: Nicols Fernndez, Macarena Gonzlez, lvaro Miranda & Pablo Muoz. Deadline: August 30th. Hard copy delivered in class with the results of your work (10 pages at most). You must attach your .do file with your solutions and send it to: nifernan@fen.uchile.cl, macgonza@fen.uchile.cl, amirandas@fen.uchile.cl and pabmunoz@fen.uchile.cl, With subject: PS1_"your name". I. Essay 1 Write a short essay (no more than one page, about 500 words) about Female Labor Participation. Support your arguments using: J. Angrist and W. Evans (1998), Children and their ParentsLabor Supply: Evidence from Exogenous Variation in Family Size; D. Contreras, D. Bravo & E. Puentes (2005) Female labour force participation in greater Santiago, Chile: 1957-1997. A synthetic cohort analysis; D. Contreras & G. Plaza (2010) Cultural Factors and female participation in Chile. It will be evaluated the argumentative line used to develop the issue, the pertinence of your arguments and your capacity to limit to the most relevant points. II. Download CASEN 2006, CASEN 2009 and CASEN 2011 from

http://www.ministeriodesarrollosocial.gob.cl/casen/bases_datos.html. Please let us know as soon as possible if you have problems getting the files. 1. Explain why the CASEN surveys contain something called factor de expansin. What is this?

2. In software STATA, how do we use the variable factor de expansin? Explain the main difference between pweights, fweights, aweights and iweights. Give examples of when you should use these 4 weights (i.e.: Descriptive Statics, Regression Analysis, etc.) 3. Present a comparison of the number of observations in each CASEN (do this at national and regional levels).

4. Define the following concepts: labor force, total employment, unemployment rate, participation rate and rate of employment. 5. Using the variable activ in CASENs, compute: the labor force, total employment, the unemployment rate, participation rate and employment rate for 2006, 2009 and 2011. How you can explain the differences between 2006, 2009 and 2011. 6. Now, look for the same statistics for United States and Spain. Then, use graphs to make comparisons between United States, Spain and Chile in 2011. Interpret your results (HINT: think about labor regulation and economic crises). 7. What is the difference between the labor market participation of females and males in Chile? Did it change between 2006 and 2011? 8. Compare the mean and variance of ingresoocupacin principal for males and females in CASEN 2011. What is the gender premium? 9. Using the variable esc in CASEN 2011, compare the levels of education of males and females. Make your comparison by decile. What can you say about your results?

Universidad de Chile Facultad de Economa y Negocios 10. According with the World Bank, to compute a poverty measure, three ingredients are needed: 1. One has to define the relevant welfare measure. 2. One has to select a poverty line that is a threshold below which a given household or individual will be classified as poor. 3. One has to select a poverty indicator which is used for reporting for the population as a whole or for a population sub-group only. Explanation: 1. Here we are going to consider as a relevant measure of welfare the income per capita, constructed by considering income variables in CASEN 2011. 2. According with the World Bank, you should use a threshold of $1.25 or $2 dollars per capita every day. 3. Finally, you should use the Foster-Greer-Thorbecke (FGT) measure of poverty, with y Now answer: i) Which is and what means the poverty gap? .

ii) How many people live under the poverty line? iii) Read the next article:http://ciperchile.cl/2012/09/14/expertos-de-la-cepaly-del-cep-exigen-a-mideplan-que-divulgue-pretest-de-encuesta-casen 2011/. Now answer: How wouldchange your results if you calculate theincome per capitawith or without the variable y11"? 11. Plot the variable hours of work for males and females (just for 2011). (Hint: Use histogram). Do you find important differences? Are the distributions continuous? Why?

12. Postulate and estimate a labor supply model of the form hours of work as a function of wage (Ingresos del Trabajo), gender and years of education. You should include a proxy for non-labor income. Please justify your proxy. Present your results just for CASEN 2011.