Introductory Econometrics: A Modern Approach 6th Edition by Jeffrey M Wooldridge

Exercise 7

The data in JTRAIN2.RAW come from a job training experiment conducted for lowincomemen during 1976–1977; see Lalonde (1986).

(i) Use the indicator variable train to determine the fraction of men receiving job training.

(ii) The variable re78 is earnings from 1978, measured in thousands of 1982 dollars. Find the averages of re78 for the sample of men receiving job training and thesample not receiving job training. Is the difference economically large?

(iii) The variable unem78 is an indicator of whether a man is unemployed or not in 1978. What fraction of the men who received job training are unemployed? What about for men who did not receive job training? Comment on the difference.

(iv) From parts (ii) and (iii), does it appear that the job training program was effective? What would make our conclusions more convincing?

Step 1 of 4

(i)

The number of men receiving job training is 185 out of 445. Thus, the fraction of men receiving job training based on the train variable is 41.57%.