Deflating wages

[Dillan Patel]

Hi,

For my very basic OLS linear model, my dependent variable is weekly wages (lnwage) and one of my independent variables is union. I am trying to deflate the union wage premium to see wages if unions were not present. To do this, I am thinking I need to take the union wage/1+union premium. Since the union premium is the coefficient on union when regressed, is there a way to store this coefficient for me to be able to deflate wages and create a new variable for this seeing how many more people are below a certain income as a result?

Thank you.

[Clyde Schechter]

If the name of the union variable is union and it is coded 0 = No, 1 = Yes:

regression command involving variable i.union
local union_premium = _b[1.union]
perhaps other code interspersed here
gen deflated_wage = wage/(1+`union_premium')

[Dillan Patel]

Thank you very much, that worked perfectly!