User Account

All Pages

What is the marginal return to schooling

Assignment Help Econometrics
Reference no: EM13752388

Please use the data file called "PS3 Wage Data" (available in .csv, .txt, or .gdt, depending on which program you choose to use) on Smartsite. This file contains data on wages (w), years of schooling (ed), and years of work experience (ex) for a random sample of 1,289 individuals, taken from the 1995 Current Population Survey by the U.S. Census Bureau. The variables in this data set include, in order by column:

w (wage)

fe (female indicator variable: 1 if person i is female and 0 if male)

nw (nonwhite indicator: 1 if nonwhite and 0 if white)

ed (years of schooling)

ex (years of potential experience)

Assuming that the multiple regression assumptions MR1-MR5 hold, estimate a multiple regression model of the following form:

1. Please estimate the equation and report your regression results (parameter estimates, standard errors, and t-statistics) in a table.

2. Based on this regression, what is the marginal return to schooling? To experience?

3. Your dropout friend claims that a year of schooling couldn't have more than a $1.25 effect on wages. Test this null hypothesis at the 95% confidence level. Will this be a one or two-tailed test? Why?

Back in 1974, an economist named Jacob Mincer proposed the following wage equation:

The Mincer equation has since become one of the most widely used equations in econometrics.

4. Which variables will you need to transform to estimate this equation? Write the transformations you will need to do to those variables.

5. Estimate the Mincer wage equation, and report your results in table form.

6. In this specification, what is the interpretation of b1? Is it different than what you got in Question 1? Why or why not?

7. Suppose you think there might be discrimination with respect to gender and race/ethnicity in the U.S. labor market. Write a model that you can use to test whether wages are lower for women and/or non-whites, controlling for education and experience.

8. Estimate your model and report your results in a table.

Reference no: EM13752388

Questions Cloud

Do we today tend to place too much confidence in science : Do we today tend to place too much confidence in science? If so, why? What problems can this lead to in our society? In your answer, make sure you draw upon what the textbook says about the modern scientific method.
Journalize entry to record payment of note at maturity : A business issued a 45-day note for $90,000 to a creditor on account. The note was discounted at 8%. Assume a 360-day year. Journalize the entry to record the issuance of the note. For a compound transaction, if an amount box does not require an entr..
Describe the company''s supply chain : Identify a process internal to the company that you wish to analyze. Describe the process internal to the company that you wish to analyze.
Calculate the initial price-new price : A-rated bonds sell at yields of 6.3%. Assume a 10-year bond with a coupon rate of 5.5% is downgraded by Moody's from Aa to A rating. Calculate the initial price. Calculate the new price.
What is the marginal return to schooling : Estimate the equation and report your regression results - what is the marginal return to schooling? To experience?
Financing strategy for the project : What is your financing strategy for the project? Consider construction-period financing and long-term financing alternatives.
Write an essay on spartacus and the slave rebellion : Write an essay on Spartacus and the Slave Rebellion and "The Spartacus War" by Barry Strauss.
Create a process flow diagram for electric fan supply chain : Create a process flow diagram for the electric fan supply chain. Select two metrics to evaluate performance of the electric fan supply chain
Inventory of the software products : Take an inventory of the software products on your laptop or pc. If you do not have one, visit the library or computer lab. Select three of the software products on the computer

Reviews

Write a Review

Econometrics Questions & Answers

  Determine loan without interest for four years

The market interest rate is 10 percent and is expected to stay at that level. Explain your choice in each of the following situation: a. Would you prefer $500 gift today or $540 gift next year b. Would you prefer a $100 gift now or $500 loan without..

  What is the level of output that maximizes short run profits

Jones Company operates within a monopolistically competitive industry. The estimated demand for its products is given by the following inverse demand function P = 1760 - 12Q It finance department has estimated its total cost function as TC

  What was the level of government spending in second quarter

In the second quarter of 2006, household income was $13,134 billion, consumption was $9,162 billion, investment was $3,340 billion, and net exports were -$777 billion. What was the level of government spending in the second quarter of 2006

  Find economic and accounting profit of charlies business

Let's explore the business of Charlie the Weaver. He owns a loom which he could sell for $100,000, but instead uses himself. He spends 1250 hours per year on his weaving. He makes little square placemats of different Hollywood scenes that sell for..

  Should computer products accept the offer to supply units

All of its current sales are to private sector customers and each pays $12.00 per unit for the equipment. The sales price is equal to 150% of average variable costs. A government agency has offered to purchase 300,000 units at $10.00 each. If Comp..

  How many watts/square meter does it represent

If 12 percent of thoes solar energy resources could be harnessed , how long would it take for an average 50 square meter solar array to fill up a car with the energu equivalent of 15 gallon thank of fasoline

  Using the following national income accounting data compute

using the following national income accounting data compute a gdp b ndp and c ni. all figures are in billions.category

  Is there any dwl associated with the cartel

The market for qbits is initially competitive and the market demand is: P = 400 - 0.4QD . The combined marginal costs of the firms in the qbit industry are:MC =50 + 0.6Q. Calculate and show how much these firms will sell and what they will charge.

  What would inflation rate be if money supply was decreased

If the velocity is fixed, what would the inflation rate be id the money supply was decreased $530 billion Is your answer consistent with the classical dichotomy Explain. Suppose that when the money supply changed.

  How to compute the optimal pricing scheme of the iphone

Normal people are willing to pay $250, and their desire to purchase does not vary with time. Ignore the time value of money and compute the optimal pricing scheme of the iPhone. Assume that there are equal numbers of each customer type, and that t..

  What would have been the size of the multiplier

Suppose that an initial $20 billion increase in investment spending expands GDP by $20 billion in the first round of the multiplier process. If GDP and consumption both rise by $10billion in the second round of the process, what is the MPC in this..

  What is the rejection region when n is large

For a two-tailed test with a 0.05 significance level, what is the rejection region when n is large and the population standard deviation is known Greater than +1.65 and less than -1.65 Greater than +1.96 and less than -1.96 Between ±1.65 Between ±..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd