1.) Using the regression results in Column (1): a.) Do workers with college degr
ID: 3333453 • Letter: 1
Question
1.) Using the regression results in Column (1):
a.) Do workers with college degrees earn more, on average, than workers with only high school degrees? How much more?
b.) Do men earn more than women on average? How much more?
2.) Using the regression results in Column (2):
a.) Is age an important determinant of earnings? Explain.
b.) Sally is a 29-year old female college graduate. Betsy is a 34-year old female college graduate. Predict Sally's and Betsy's earnings.
Results of Regressions of Average Hourly Earnings on Gender and Education Binary Variables and Other Characteristics, Using 2012 Data from the Current Population Survey Dependent variabie: average hourly earnings (AHE) Regressor 8.32 College (X,) Female (X2) 8.31 8.34 3.80 0.52 0.18 1.23 -0.43 2.05 3.85 0.51 Age (X) Northeast (X4) Midwest (Xs) South (X) Intercept 17.02 1.87 Summary Statistics SER R2 R2 9.79 9.68 9.67 0.162 0.180 0.182 7440 7440 7440Explanation / Answer
Answer to all the questions is as follows:
1.
a. Yes, they do. As the variable College has a positive coefficient , college going students earn more than workers with only high schoold degrees.
How much more? They earn more by ~8.31 units.
b. Yes, males earn more than females. How much more? By 3.85 units approximately
2.
a.Yes, it is. It is statistically significant therefore age has significant relationship with Average Hourly Earnings
b. Sally' earnings = 8.32*1-3.81*1+.51*29+1.87 = $21.17 per hour
Betsy' earnings = 8.32*1-3.81*1+.51*34+1.87 = $23.72 per hour
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