Task 4

Your 4thtask is to study starting graduating wages. OECD (2020a) identifies significant wage differences associated with fields of study (check its Figure A4.5, for example). Information on UK graduate salaries is available from recruiting sites and Jo, a recent graduate, researched them. They found that the average annual graduate starting salary in the UK in 2020 was 22,837 across 70 different fields of study, varying from 34,840 for Dentistry to 15,184 for Creative Arts & Design (source: https://www.bridgewateruk.com).

Assuming salaries are normally distributed with a standard deviation of 4,000, find the probability that a randomly selectednew graduate annual salary ...

1. a)Is equal or lower than 24,000 [2%]
2. b)Is higher than 30,000? [2%]
3. c)Varies between 20,000 and 26,000? [2%]
4. d)Find the average annual starting salary that will be exceeded by 5% of the new graduates (or,
5. equivalently, the lower bound salary of the top 95% earners). [3%]
6. e)Interpret your results and compare them with those of Task 3. What can you conclude? [6%]