5.4 Read the box “The Economic Value of a Year of Education: Homoskedasticity or Heteroskedasticity?” in Section 5.4. Use the regression reported in Equation (5.23) to answer the following.

a. A randomly selected 30-year-old worker reports an education level of 16 years. What is the worker’s expected average hourly earnings?

b. A high school graduate (12 years of education) is contemplating going to a community college for a 2-year degree. How much is this worker’s average hourly earnings expected to increase?

c. A high school counselor tells a student that, on average, college graduates earn $10 per hour more than high school graduates. Is this statement consistent with the regression evidence? What range of values is consistent with the regression evidence?