Question

II. (15pts) You are given the following three estimated models, with all the variables described as in question II Dependent variable: educ 0.118***0.062***0.116** (0.024) (0.006) (0.024) meduc 0.094* C0.029) 0.095*** (0.029) married 0.252*0.247** (0.071) (0.068) 0.025 0.026* 0.020** (0.011) (0.011) (0.009) meduc.educ -0.006 C0.002) 0.006* C0.002) marrted. ten 0.009 (0.000 C0.009) (0.009) 0.0002 -0.0003 0.0003 C0.001) (0.0005) (0.001) Constant 4.694*** 5.597*** 4.932 (0.325) (0.100) (0.324) observations 857 R2 857 857 0.152 0.175 *p<0.1; p<0.05; p<0.01 Note: a. Wha education? Explain. (2pts) b. Based on the estimated models (1) and s education has a significant impact on workers' wages. (State clearly your null and alternative hypotheses, the statistics to be used, and your conclusion) (2 pts). c. Provide a possible rationale for the presence of the variable tenure in the model estimated above. (1pt) d. Holding everything else constant, what is the estimated effect of an additional tenure year on the wage of: i) a married worker? ii) a non-married worker? (2pts) e. At what number of tenure years does an additional tenure year actually lower the predicted log(wage) for i) a married worker? ii) a non-married worker? (2 pts) f. Calculate the estimated effect of the 20th tenure year on the wage of: i) a married worker; ii) a non- married worker. (2pts) g. From the estimated equation above, provide an appropriate interpretation for each coefficient associated to the variables married, and married.ten. (2pts) h. Based on estimated models (1) and (3), and with a 5% significance level, test whether the marital t is the estimated return to education? Does it depend positively or negatively on mother's (2) and with a 5% significance level, test the hypothesis that tatistically significant impact on the worker's earnings (state clearly your mull and alternative heses, the statistics to be used, and your conclusion). (2 pts)

Answer 1

uus 0.062

dも 一 3.28 n.a o, o a 241g ,

to Shas t ho