Was There Age Discrimination?

In this assignment, you must decide whether to be the attorney for some senior workers who have claimed that they were laid off due to their age.  The company  came on some hard times and needed to lay off some workers.  You can also choose to be the attorney for the company.  You must consider the likely strategy of the other side.  It is good in this case to consider the timing of the strategy - from a simple analysis to the more complicated.

You should approach this question as follows:

1) Is there a prima facie case for discrimination? (Is there a significant difference in the layoff rates for the covered and uncovered group?)  This requires a simple analysis that computes layoff percentage for two groups.  You must decide how to define the groups (40+?, 43+?) or you can look at every possible definition of a group (using cutoffs at EVERY age).  This is a comparison of percentages between two groups.  The correct statistic to use is the Z-stat.  However, people often use a t-statistic when the Z is unavailable.  The Z is available if you have the Prentice Hall add-in for EXCEL.  If not, you can go to TOOLS-DATA ANALYSIS and choose the t-stat.

2) If the answer to 1) is "yes," is there any indication that a valid evaluation of performance was made that was the actual basis for the layoff?  Are there examples in the data that favor one explanation (age discrimination) over the other (layoff for cause)?  (LOOK AT THE DATA, YOU ONLY HAVE A FEW OBSERVATIONS!) You can also look at the individual data and see "who" was laid off. This requires you to perform a multiple regression or multiple probit or logit where layoff is the dependent variable and age and evaluation are independent variables.  You should look at the significance of age in this regression as support for age discrimination in the layoff.  You can use an age dummy variable to measure age, since we want to compare two groups.  You can make this with an IF formula IF(age cell>43,1,0) or substitute the age cutoff that you have used for 43

3) What do think this case will ultimately hinge on? (Are the data perfectly reliable?)

Your dependent variable will measure whether or not the person was laid off.

The data file is available in EXCEL and Stata format.  The file contains information on the employee's age, gender and performance rating as well as a variable indicating whether or not the employee was laid off.  

You should present your results with some statistical analysis, as well as some charts.

This assignment is to give you an idea what might happen in a legal case where you are being sued for discrimination.  Think about it from both the management and the worker perspective.