Question: Using the cps09mar dataset and the subsample of non-Hispanic Black individuals (race code = 2) and white individuals (race code = 1) test the hypothesis

Using the cps09mar dataset and the subsample of non-Hispanic Black individuals (race code = 2) and white individuals (race code = 1) test the hypothesis that the returns to education is common across groups.

(a) Allow the return to education to vary across the four groups (white male, white female, Black male, Black female) by interacting dummy variables with education. Estimate an appropriate version of the regression reported in Table 4.1.

(b) Find the Wald (or F) statistic for this hypothessis. What is the appropriate distribution for the test statistic? Calculate the p-value of the test.

(c) What do you conclude?

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