Untitled

"""
clear
set obs 200
gen female = 0
replace female = 1 if _n>100
** Education is costly, as in a Spence model.
** The cost of getting an education is distributed uniformly from 0 to 1, in both genders.
** Having an education doubles your wage.
** You only pursue an education if the benefit is worth the cost.
gen education_cost
** Women are discriminated against, and earning 20% less than men.
** Occupation 1 pays $1 for men, and $0.80 for women.
** Only people with an education can be in Occupation 1.
** Occupation 2 pays $0.50 for men, and $0.40 for women
=
mod (_n, 100)/100
** Women are less likely to get an education because of the discrimination
** Half of men get an education vs. 40% of women.
=
gen wage = 1 if ! female & education_cost>=0.5
replace wage
0.5 if ! female & education_cost<0.5
replace wage = 0.8 if female & education_cost>=0.6
replace wage = 0.4 if female & education_cost<0.6
gen goteducation = 0
replace goteducation=1 if wage>0.7
reg wage female
reg wage female goteducation
"""

import pandas as pd
import numpy as np
import statsmodels.formula.api as smf


def run():
    # Create a DataFrame with 1000 observations
    df = pd.DataFrame(index=range(1000))

    # Generate 'female' column
    df['female'] = 0
    df.loc[500:, 'female'] = 1

    # Generate 'education_cost' column
    df['education_cost'] = np.random.uniform(0, 1, 1000)
    
    # Generate 'wage' column
    df.loc[(df['female'] == 0) & (df['education_cost'] >= 0.5), 'wage'] = 10
    df.loc[(df['female'] == 0) & (df['education_cost'] < 0.5), 'wage'] = 5
    
    df.loc[(df['female'] == 1) & (df['education_cost'] >= 0.7), 'wage'] = 10
    df.loc[(df['female'] == 1) & (df['education_cost'] < 0.7), 'wage'] = 5

    # Generate 'goteducation' column, anyone with wage > 5 must have gotten education
    df['goteducation'] = 0
    df.loc[df['wage'] > 7, 'goteducation'] = 1

    # Log-transform 'wage'
    df['log_wage'] = np.log(df['wage'])

    # Run regressions
    model1 = smf.ols(formula='log_wage ~ female', data=df).fit()
    model2 = smf.ols(formula='log_wage ~ female + goteducation', data=df).fit()

    print(model1.summary())
    print(model2.summary())

run()