Suppose a researcher estimated the relationship between salary, gender, and age among a group consisting of male
Question:
Suppose a researcher estimated the relationship between salary, gender, and age among a group consisting of male and female workers but ignored the fact that, on average, male workers have more work experience than females. The estimated regression of salary on gender and age is
where Si = salary of a worker, Gi = 1 if the worker is male and 0 if the worker is female, and Ai = the employee’s age. Standard errors of the coefficients are in parentheses.
When experience was included in the regression, the estimated regression is
where Xi = the years of work experience of the worker.
Comparing the two estimated regressions, does there appear to be salary discrimination by gender? Discuss the implications of omitting the experience variable in the first regression.
Step by Step Answer:
Modern Labor Economics Theory And Public Policy
ISBN: 9780132540643
11th Edition
Authors: Ronald Ehrenberg, Robert Smith