Question

We estimated the following model (SE in parentheses):

log(wage)=0.21 + 0.27 male + 0.065 educ + 0.025 male x educ

(0.108) (0.010) (0.010)

R2=0.52, n=10021

What is the rate of return to education for females (specify the units of measurement)? What is the t-statistics? Can we reject the null hypothesis that the rate of return to education for females is equal to zero?

What is the rate of return to education for males? What’s the t-statistics? Is there statistical evidence that the rate of return to education is different for females and males?

Draw a graph using log(wage) on the vertical axis and educ on the horizontal axis showing the relationship between log(wage) and educ for females and males.

Answer 1