4.0. Analysis and Results
In this chapter, statistical results of the revenue vs. education in The USA and in The UK will be comparatively illustrated. The time period chosen lies between 2008 and 2013 (immediately after the effects of the financial crisis started to appear, and up until today); firstly, data will be presented via bar charts and statistical information, and will continue with a regression for each country which will illustrate the qualitative parameters of the chosen model, and will establish the amount of influence between the “education level” and “annual income” series. The fixed model (or the Ordinary Least Square approach) is the most suitable model for our datasets, according to the result of the Hausman test.
4.1. Education and income in USA
4.1.1. Statistic description of the data
The annual income in The USA, per year and education degree, is illustrated in the following chart:
Figure 1: Median annual wage in The USA for the 2008-2013 period
Figure 2: Median annual wage evolution by education level in The USA for the 2008-2013 period.
Figures 1 and 2 offer a view of the median annual wage distribution of the US population by year and then by education level. The graphic in Figure 1 shows an obvious increase of the income values for higher education levels (bachelor, master, PhD) which is in accordance to the theoretical assumptions of this research paper. When analysing the wage differences between the separate education levels in Figure 2 it can be noticed that in recent years the discrepancies are much lower than in the beginning of the period. These reduced discrepancies however are not caused by an increase in the lower education wages, but rather by a decrease of the earnings of individuals with higher education studies, namely undergraduate and graduate. The major reason for this situation is the financial crisis that negatively affected the income values of the US population.
Although the recession started in 2007, its impact on the population’s earnings only began to emerge in 2009 with a dramatic decrease of the higher incomes, and a more subtle reduction of the lower incomes. As it was also noticed in a Huffington Post article, that the recovery after the recession has affected US salaries to a larger extent than the actual crisis (Berman, 2011). Within the 2009-2011 time period the wage values have remained approximately constant, with a low increase for the individuals having below high school or high school levels of education. The uptrend has however become more obvious after 2012, for all education categories.
In order to compute the OLS regression (Ordinary Least Squares regression), the data has been pre-processed. The level of education has been quantified; five pertinent levels of education were chosen for input, with each degree being designated with an integer number, starting with “0” and ranging up to “4”, as follows:
3 Master Degree
2 Bachelor Degree
0 Less than...