Suppose that a pay equity plan has just been put in place in your organization. The pay equity consulting firm did a job evaluation and assigned points to each of the male-dominated and female-dominated jobs. It then estimated the following male and female pay lines by ordinary least squares regression, where Y denotes annual earnings, P denotes job evaluation points, and the subscripts m and f denote male ad female respectively.

Y_m = 5000 + 100P_m

Y_f = 4000 + 80P_f

_{Assume that the average job evaluation score was 300 points for male-dominated jobs and 200 for female-dominated jobs.}

a) What is the average pay in male-dominated jobs and in female dominated jobs?

b)use a Oaxaca decomposition to decompose the average pay differential between male- and female- dominated jobs into two components: a portion attributable to the differences in job evaluation points (valued according to the male pay for such points) and a portion attributable to differences in pay for the same job evaluation points.

c)Use the same decomposition but this time evaluate the differences in job evaluation points according to the female pay for such points