Module name and code Econometrics Semester Semester 1, 2021-22 academic year

Module name and code	Econometrics
Semester	Semester 1, 2021-22 academic year
Individual CW weighting	40%
Lecturer setting the task	Dr. Ziyodullo Parpiev
Contact details	e-mail: [e-mail]
Office hours	By appointment
Date set	October 18, 2021
Deadline	December 24, 2020
The Individual CW checks the following learning outcomes: Demonstrate the awareness of recent research and debates around it; Understand, handle and interpret key macroeconomic data within the analysis; Demonstrate the ability to use and apply with some confidence, standard algebraic, statistical and diagrammatic representations of relevant models; Demonstrate the ability to critically assess and use macroeconomic principles and concepts.

TASK

The Individual CW checks the following learning outcomes: Demonstrate the awareness of the empirical research on a given country and topic; Understand, handle and estimate empirical econometric model (Mincerian wage equation); Demonstrate the ability to develop hypotheses and test the econometric model and derive conclusions; Demonstrate the ability to interpret the results of the Mincerian wage equation; Demonstrate the ability to develop policy recommendations based on the model estimates.

TASK
Each student should choose a country (the same country cannot be chosen by more than 1 students) on a “first come first serve” basis. In order to record the students choice of countries, Google Docs document will be distributed among students. The list of countries:

1. 
   Belgium
   
2. 
   Bulgaria
   
3. 
   Czechia
   
4. 
   Denmark
   
5. 
   Germany
   
6. 
   Estonia
   
7. 
   Ireland
   
8. 
   Greece
   
9. 
   Spain
   
10. 
    France
    
11. 
    Croatia
    
12. 
    Italy
    
13. 
    Cyprus
    
14. 
    Latvia
    
15. 
    Lithuania
    
16. 
    Luxembourg
    
17. 
    Hungary
    
18. 
    Malta
    
19. 
    Netherlands
    
20. 
    Austria
    
21. 
    Poland
    
22. 
    Portugal
    
23. 
    Romania
    
24. 
    Slovenia
    
25. 
    Slovakia
    
26. 
    Finland
    
27. 
    Sweden
    
28. 
    United Kingdom
    

After choosing the country, each student should download a cross-sectional data using the following link:
https://ec.europa.eu/eurostat/web/microdata/statistics-on-income-and-living-conditions
Data for 1 year (latest year for which data is available) should be downloaded, and variables should be generated before doing descriptive statistics, estimation and testing.
For each country and year the data are grouped in four files: Household Register (D), Personal Register (R), Household Data (H) and Personal Data (P). A detailed description of the variables is available in the annual guidelines.

Using the data, the student has to estimate a Mincerian wage equation.

The relationship between wages of individuals and the accumulated human capital is an important topic of research in the present era. Mincer (1958, 1974) developed a relationship in which he used the main components of accumulated human capital as determinants of the wages earned by individuals in the labour market. Mincer’s (1974) proposed model takes natural log of wages as a function of linear term for schooling and linear and quadratic terms for experience (Eq. 1.1) but now it is very common to include other social, demographic, and regional wage affecting factors in the set of explanatory variables of the Mincerian semi-log specification. The extended version of the Mincerian wage model (Eq. 1.1) can be algebraically represented as:

where represents monthly wage of ith individual, Educ represents educational attainment measured in number of years of schooling, is the value of ith individual for kth explanatory variable, are the coefficients associated to K explanatory variables respectively and i  is error term of the model assumed to follow normal distribution with zero mean and a constant variance. The Xs are the variables that are included in design matrix other than schooling, like linear and quadratic terms for labour market experience and other variables believed to affect the wage determination process in relevant labour market at individual level.
ASSESSMENT CRITERIA
In undertaking coursework, students should be able to select and then deploy, graphically and algebraically, relevant models. They should be able to assess the quality of any relevant data and evidence and be aware of the interaction of policy and theory and the continuing debate about such issues. Finally, they should be able to demonstrate high-level presentational skills, including logical ordering of material, satisfactory use of English and referencing. High grades are awarded for answers with deep economic analysis, which have a thoughtful structure, clear message displaying personal reflections informed by wider reading of articles and/or other commentaries and a good grasp of details. Do not write more than 3000 words of text (excluding tables, appendices, and references). If you exceed the word limit, your mark will be reduced.
High grades excel in at least one of these criteria:
• Comprehensiveness and accuracy; clarity of argument and expression;
• Wider discussions of current debates.
Middle grades demonstrate a good understanding of relevant details and a sound grasp of basic principles.
A low grade demonstrates some knowledge and/or understanding of the general idea but lacks in the following:
• Descriptive only;
• Does not answer the question directly;
• Misses key points;
• Contains important inaccuracies;
• Assertions not supported by author or evidence.
Answers in a borderline fail typically:
• Only cursorily cover the basic material;
• There are no evidences or arguments.