{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

WageEqQ_handout

# WageEqQ_handout - B2 Consider the following wage equation...

This preview shows pages 1–2. Sign up to view the full content.

B2) Consider the following wage equation that has been estimated from a sample of 35-65 year old older male workers in a single large company: Dependent variable: ln wage (1) (2) (3) Constant 3.825 3.441 3.582 12.10 12.11 12.04 Age 0.154 0.155 0.148 3.18 2.11 1.98 Age 2 -0.014 -0.013 -0.014 1.55 2.04 2.03 NT - 0.0091 0.0064 4.11 3.90 NT 2 - 0.0094 0.0026 3.91 3.27 NT 3 - -0.0006 -0.0001 4.06 3.84 EDUC 0.183 - 0.122 5.08 6.61 No of obs 4823 4823 4823 R 2 0.104 0.221 0.240 where Age is Age in years divided by 10; NT is a variable indicating the total number of days of training courses workers have taken over their career and EDUC is a dummy variable indicating if the individual has higher education qualifications. Numbers in italics are absolute t-ratios. a) Taking the specification in column (1), at what age are wages predicted to be highest? Is there statistically significant evidence of declines in wages with age after this point? b) Use the table above to test the hypothesis that the returns to higher education estimated in model (1) are 10%. c) Considering equation (2), what evidence do the estimates provide on the nature of returns to training? At what level of training are returns to training at their maximum? d) In what circumstances would the estimator of the returns to training you derived in part (c) be a biased estimate of the true effect? Give at least one example that could

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 4

WageEqQ_handout - B2 Consider the following wage equation...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online