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# Annual Earnings Use the STATA output at the end of this handout to answer the following questions. Respondents are a random sample of 616 workers....

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Annual Earnings
Use the STATA output at the end of this handout to answer the following questions. Respondents are a random sample of 616 workers. Model 1 Model 1 estimate; the following model: ln(annearn),— = 60 + ﬁlmalei + 5,; a) Interpret the coefﬁcient on male.
b) Describe the distribution of .81-
c) Find the 90 percent conﬁdence interval for 31- d) The R-squared value has been intentionally removed. Find the value and show two different
ways to get it- showing both the formula and the values e) What is the predicted ln(am1earn) for a male? For a female?
f) What is the covariance between male and ln(annearn)? What is the correlation?
g) What is 6531? What is our estimate of this in our sample? h) Does this prove discrimination against women in the US labor market? Explain brieﬂy.

Data : Fringe . ata ; Wooldridge , Introductory Econometrics
. desc Lannearn male educ Lannhes exper expersq
storage
display
value
variable name*
type
Format
labe ]
variable labe ]
Lannearn
Float
\$9 . 09
Log ( annearn )
maze
byte
\$9 . 09
= 1 if male*
educ
byte
\$9 . 09
years schooling
Lannhers
Float
\$9 . 09
Log ( annhrs )
expec
byte
\$9 . 09
years work experience
expersa
int
\$ 9 . 09
exper * 2
sum Lannearn male educ Lannhes exper expersa
Variable
Obs
Mean
Sta . Dev .
Min
Max
Lannearn
616
9 . 293752
. 59572 86\
6 . 575912
11 . 6868 8
male
616
6412338
. 480 02 8 2
O
educ
616
12 . 51461
2 . 733076
18
Lannhes
616
7 . 613439
. 2328347
6 . 436151
8 . 451054
exper
616
18 . 61688
12 . 32906
O
60
expersq |
616
198 . 3474
572 . 4 8 63
O
3600
MODEL 1
zeq Lannearn male*
Source
SS
at
MS
Number of obs
616
- - - .
El 1 ,
614 )
202 . 35
Mode !*
54 . 101 1048
1
54 . 101 1048
PROD &gt; E
0 . 0000
Residual
164 . 15 7 809
614
. 26735 79 95
R - squared
0 . 2467
Total !`
_ 218 . 25891 4
615
. 354892543
Root MSE
. 51707
Lannearn 1)
CORE .
Std . Err .`
P&gt; It I
1958 Conf . Interval!
maze
. 6178723
. 0434352
14 . 23
0 . 000
. 5325727
. 703172
cons
8 . 897551
. 0347817
255 . 81
0 . 000
8 . 829246)
8 . 965857

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