Association between Education and Earnings in Economics and Quantitative Analysis

ECONOMICS AND
QUANTITATIVE
ANALYSIS

Table of Contents
Purpose............................................................................................................................................3
Background - Association between Education and Earnings..........................................................3
Method.............................................................................................................................................3
Results..............................................................................................................................................3
Discussion........................................................................................................................................8
Recommendations............................................................................................................................8
REFERENCES................................................................................................................................9

Purpose
The very purpose of this report is to identify that association between the two most important
variables of every economy that is wages and education (Bartik and Hershbein, 2018). So, in this
report by applying various statistical techniques and tools this relationship will be identified and
stated that whether there is any association exists between these two variables or not and or if
there is any other external factors that are causing changes in these variables.
Background - Association between Education and Earnings
Basically, there is a strong link exist between the education of an individual and their
earnings patter and the most important thing is that most of the economist knew that. That’s why
the economist put their focus on these issues more. Providing the best education system to the
students is the most crucial and important role of the respective country. It is because students
are the future of the country and world. The link between the education and earning is same as
the link between the investment and rate of return. This association exist not because that the
higher degree candidates provide and directly raise the productivity of the company. But the link
is that higher education candidates will and are likely to be more productive as compared to the
people with less and no education. High and rising-income inequality in the country is increases
on a daily basis just because it depends upon the level of education a candidates pursue and have
(Witteveen and Attewell, 2019).
Because of the direct relation between the education level and income level, the
government of the UK have to launch various schemes related to providing free education to the
poor people. So, that there income status can be improved through increase in earnings.
Method
In this report, in order to identify the association between two variables that is years of education
and wages rate, the quantitative methods of analyzing data has been adopted (Bernhofen, 2019).
To quantitatively analyze the data related to these variables various statistical tools will be
applied such as regression, correlation, statistical significance test, etc.
Results
a. descriptive analysis of hourly wages and years of education
Mean wages are found to be 22.30 while mean education is around 13.76 or 14 years which
means the sample has attended almost 14 years of education and are earning wages @ of 22.3
per hour.
The standard deviation comes out at 14.02 for wages which means there can a variation of 14.02
from the mean wages in the sample. While the standard deviation of 2.72 or 3 years has been
found for education level, which means there can be a variation of 3 years from the mean
education level in the sample.