Consider the following: You are part of a policy team in the Australian government tasked with examining how to reduce the gender-pay-gap between men and women. One policy that has been suggested is to improve the representation of women on board of Australian public companies. The minister is particularly interested in overseas experience and the team discovers that in 2003 Norway passed a law mandating 40 percent representation of each gender on the board of public limited liability companies. Your team is tasked with figuring out whether a board quota is an effective policy for reducing the gender pay gap. Answer all of the following:

 

a) One member of your team suggests looking at the gender-pay-gap in Norway in 2002 and 2004 to determine the causal effect of the policy. Is this a good strategy? Why or why not?