Discuss the wage regression

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Reference no: EM131480263

Question: Consider the regression results given in Table.

(a) Suppose you want to test the hypothesis that the true or population regression coefficient of the education variable is 1. How would you test this hypothesis? Show the necessary calculations.

(b) Would you reject or not reject the hypothesis that the true union regression coefficient is I?

(d) What other variables are missing from the model?

(e) Would you run separate wage regressions for white and nonwhite workers, male and female workers, and union and non-union workers? And how would you compare them?

(f) Some states have right-to-work laws (i.e. union membership is not mandatory) and some do not have such laws (I.e. mandatory union membership is permitted). Is it worth adding a dummy variable taking the value of 1 if the right-to-work laws are present and 0 otherwise? A priori, what would you expect if this variable is added to the model?

(g) Would you add the age of the worker as an explanatory variable to the model? Why or why not?

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Reference no: EM131480263

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