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Residuals are close to normal distribution and look random. The model is adequate. (5.f) Test the hypothesis
H0:?1?0 against H1:?1?0 at 5% level using results in (5.d).
(5.g) Make a list of the \ ’underpaid’ employees (large
negative residual).
Notice that the first 3 employees with the largest negative residuals who are under paid are all female. Among those who are the most overpaid, 3 out of 5 are male.
(5.h) Combine results in (5.b), (5.f) and (5.g). What is your conclusion for the question raised in the beginning?
Explain.
My conclusion is that there is gender discrimination again female employees in the process of the company’s
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salary structure.
Results in Model 5.b suggest no discrimination from a simple comparison between salaries of male and females. Such comparisons are inadequate since we all know that salaries are highly dependant upon employees’ personal experiences and skills. This is exactly demonstrated in the second model, when the comparison is made with the adjustment of age, experiences and education, it shows significant difference between males and females on average.
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