Dependent Variable: WAGES Method: Least Squares Date: 11/25/17 Time: 17:10 Sampl

Question

Dependent Variable: WAGES

Method: Least Squares

Date: 11/25/17   Time: 17:10

Sample: 1 4064

Included observations: 4064

CR0 (ordinary) cluster-robust standard errors & covariance

Cluster series: WAGES (721 clusters)

Standard errors and t-statistic probabilities adjusted for clustering

Variable

Coefficient

Std. Error

t-Statistic

Prob.  

C

-81483.94

8886.487

-9.169421

0.0000

AGE_HD

3058.572

274.2664

11.15183

0.0000

AGE_HD^2

-34.79184

3.113284

-11.17529

0.0000

MALE

7757.075

975.4061

7.952662

0.0000

WHITE

7346.491

816.4471

8.998122

0.0000

TENURE

632.4938

76.47722

8.270355

0.0000

YEARS_EDUCATION

2752.376

348.7425

7.892287

0.0000

MARRIED

8486.884

1132.893

7.491341

0.0000

ASSOC

-682.0189

1730.465

-0.394125

0.6936

BACHELOR

10804.11

2427.299

4.451083

0.0000

GRADUATE

24862.90

4953.374

5.019386

0.0000

R-squared

0.303229

    Mean dependent var

40035.23

Adjusted R-squared

0.301510

    S.D. dependent var

34082.26

S.E. of regression

28484.49

    Akaike info criterion

23.35481

Sum squared resid

3.29E+12

    Schwarz criterion

23.37189

Log likelihood

-47445.97

    Hannan-Quinn criter.

23.36086

Durbin-Watson stat

1.857717

    Wald F-statistic

36.21385

Prob(Wald F-statistic)

0.000000

Given your results at what age would you expect a person's earnings to be maximized?

Dependent Variable: WAGES

Method: Least Squares

Date: 11/25/17   Time: 17:10

Sample: 1 4064

Included observations: 4064

CR0 (ordinary) cluster-robust standard errors & covariance

Cluster series: WAGES (721 clusters)

Standard errors and t-statistic probabilities adjusted for clustering

Variable

Coefficient

Std. Error

t-Statistic

Prob.  

C

-81483.94

8886.487

-9.169421

0.0000

AGE_HD

3058.572

274.2664

11.15183

0.0000

AGE_HD^2

-34.79184

3.113284

-11.17529

0.0000

MALE

7757.075

975.4061

7.952662

0.0000

WHITE

7346.491

816.4471

8.998122

0.0000

TENURE

632.4938

76.47722

8.270355

0.0000

YEARS_EDUCATION

2752.376

348.7425

7.892287

0.0000

MARRIED

8486.884

1132.893

7.491341

0.0000

ASSOC

-682.0189

1730.465

-0.394125

0.6936

BACHELOR

10804.11

2427.299

4.451083

0.0000

GRADUATE

24862.90

4953.374

5.019386

0.0000

R-squared

0.303229

    Mean dependent var

40035.23

Adjusted R-squared

0.301510

    S.D. dependent var

34082.26

S.E. of regression

28484.49

    Akaike info criterion

23.35481

Sum squared resid

3.29E+12

    Schwarz criterion

23.37189

Log likelihood

-47445.97

    Hannan-Quinn criter.

23.36086

Durbin-Watson stat

1.857717

    Wald F-statistic

36.21385

Prob(Wald F-statistic)

0.000000

Given your results at what age would you expect a person's earnings to be maximized?

Explanation / Answer

earnings = -81483.94 + 3058.572 * AGE_HD - 34.79184 * AGE_HD^2

differentiate earnings wrt age_hd and equating it to zero:

3058.572 - 34.79184 * 2* AGE_HD = 0

3058.572 / (34.79184 * 2) = AGE_HD

43.9553 = AGE_HD

so, AGE_HD = 44

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