Adjust for wage increase

[Lynn Zhang]

Hello everyone,

Please see below. I would want to adjust for wage inflation for the 3 years my data is on. Specifically, I would want to use June 2018 as a base, according to a year on year data, the average earnings is said to have increased 3.9% in June 2019, and changed by -1.3% in June 2020. How would I apply this to all of my salary data?

* Example generated by -dataex-. For more info, type help dataex
clear
input long salary str7 academicyear
   1 "2019-20"
   1 "2019-20"
   1 "2019-20"
  10 "2017-18"
  14 "2017-18"
  17 "2017-18"
  23 "2017-18"
  26 "2018-19"
  28 "2017-18"
  30 "2017-18"
  40 "2017-18"
  40 "2017-18"
  40 "2017-18"
  40 "2018-19"
  45 "2017-18"
  48 "2017-18"
  50 "2017-18"
  50 "2017-18"
  50 "2017-18"
  91 "2017-18"
 100 "2019-20"
 120 "2017-18"
 200 "2019-20"
 300 "2017-18"
 520 "2018-19"
 600 "2019-20"
 684 "2019-20"
 800 "2018-19"
 850 "2019-20"
 900 "2018-19"
1000 "2018-19"
1000 "2019-20"
1000 "2019-20"
1200 "2018-19"
1200 "2018-19"
1200 "2018-19"
1200 "2019-20"
1350 "2018-19"
1500 "2017-18"
1500 "2017-18"
1500 "2017-18"
1500 "2018-19"
1500 "2018-19"
1680 "2017-18"
1800 "2019-20"
2000 "2017-18"
2000 "2017-18"
2000 "2017-18"
2000 "2018-19"
2000 "2018-19"
2000 "2018-19"
2500 "2018-19"
2600 "2019-20"
3000 "2017-18"
3000 "2017-18"
3000 "2017-18"
3000 "2017-18"
3000 "2017-18"
3000 "2017-18"
3000 "2018-19"
3000 "2018-19"
3000 "2018-19"
3000 "2018-19"
3000 "2019-20"
3252 "2019-20"
3300 "2019-20"
3423 "2018-19"
3500 "2018-19"
3500 "2018-19"
3600 "2018-19"
3624 "2018-19"
3800 "2017-18"
3840 "2018-19"
4000 "2017-18"
4000 "2017-18"
4000 "2017-18"
4000 "2017-18"
4000 "2017-18"
4000 "2017-18"
4000 "2017-18"
4000 "2019-20"
4000 "2019-20"
4320 "2018-19"
4500 "2018-19"
4500 "2019-20"
4800 "2018-19"
4814 "2019-20"
5000 "2017-18"
5000 "2017-18"
5000 "2017-18"
5000 "2017-18"
5000 "2017-18"
5000 "2017-18"
5000 "2017-18"
5000 "2017-18"
5000 "2017-18"
5000 "2017-18"
5000 "2017-18"
5000 "2017-18"
5000 "2018-19"
end

[Clyde Schechter]

gen adjusted_salary = salary/cond(academicyear == "2019-20", 1.039, 1)

The change in June 2020 is irrelevant since your data does not extend beyond that time point.

Added: I suppose that since you mentioned the change in June 2020, your full data set might include observations with academicyear = "2020-21" or beyond, even though the example you showed didn't. So, if it does, then you need an additional command after what was shown above:

replace adjusted_salary = adjusted_salary/cond(academicyear >= "2020-21", 1-.013, 1)