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5. Suppose a researcher, using data on the number of years of education a person has received and their annual earnings (in thousands of
5. Suppose a researcher, using data on the number of years of education a person has received and their annual earnings (in thousands of dollars) from 200 people, estimates the OLS regression: Earnings 41.36+ 1.42 Education = (a) If the number of years of education a person receives increases by three, on average, would the annual earnings increase or decrease and by how much? (b) Meghan wants to earn at least $65,000 and she has recently earned a Bachelor's degree in Eco- nomics, completing 16 years of education in general. She is considering whether she should pursue a Master's degree. Will she reach her income target once she spends two more years earning a Master's degree? Explain mathematically and show your work.
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