Individual Assignment Instructions.

In labour economics, the labour force participation rate
(LFPR) is defined as the number of persons in the labour
force (either employed or unemployed) divided by population.
The unemployment rate (URATE) is defined as the number of
persons unemployed divided by the labour force.  Data on
both concepts are reported for a large number of age-gender-
province groups.  Assume "theory" suggests that the LFPR for
some group should be a negative function of the URATE for
that same group (the "discouraged worker" effect) but a
positive function of the URATE for that same age-province
but OPPOSITE gender group (the "additional worker" effect).
For example, the LFPR for females aged 20-24 in British
Columbia is suggested to be a negative function of the URATE
for females aged 20-24 in British Columbia, and a positive
function of the URATE for males aged 20-24 in British
Columbia.

This assignment asks that you gather the data for these
three variables for a specific age-gender-province group,
and estimate the suggested multiple regression equation.
The age-gender-province group you will work with is based on
your student number.  The last digit of your student number
determines the province you will deal with, and the next-to-
last digit determines the age group you will deal with, as
noted below.

Last digit       Province
0                Newfoundland
1                Prince Edward Island
2                Nova Scotia
3                New Brunswick
4                Quebec
5                Ontario
6                Manitoba
7                Saskatchewan
8                Alberta
9                British Columbia

Next-to-last digit   Age group
0 or 1               15+
2                    55+
3                    25-44
4                    45-64
5                    15-19
6                    20-24
7                    25+
8                    25-54
9                    15-24

Finally, if you are female, use the data for females; if you
are male, use the data for males.

For example, if you are female and your student number ends
in 86, you will work with the LFPR for females aged 25-54
years in Manitoba.

All data are obtainable from Cansim II (see my web page),
and finding the data in Cansim, downloading it, and getting
it into EXCEL is part of the assignment.  While you are in
Cansim, spend some time looking around at the types of data
which are available.  All data are time series in nature.
Use all the data available - all series are monthly data
beginning in January 1976.  In early May, when I prepared
this assignment, 315 observations were available for all
series.

Do the following things (any order, any combination):

1.  Estimate the equation.
2.  Generate seasonal dummies and test for seasonality.
3.  Test for autocorrelation using Durbin-Watson.
4.  Test for nonlinearity using quadratic terms in the two
     unemployment rate variables.

Is there evidence of a discouraged worker effect or
additional worker effect for your data?