Mincer equation. In Lecture Note ?c, we derived the Mincer equation relating In earnings to schooling, experience and experience squared. Specically: lny = 1113(0) + pa + [pk{0)]x [FRED] x2, 2 where M0) is the fraction of time spent investing in human capital immediately upon leaving school. This equation is derived by assuming that the fraction of time spent investing in human km) 3:. Assume that a worker 1"! capital for a worker with x years of experience is Hr] = M0) has a 50year time horizon (n = 50), p = 0.1, and M0) = 0.3. a) What is the difference in In earnings between a worker with 10 years of experience and a worker with 0 years of experience? b) At: what level of experience are earnings maximized? c) Now assume that improvements in medical technology extend the worker's time horizon to n = 55. Intuitively, do you think that k(0) will increase, decrease, or stay the same? (1) Assume M0) rises to 0.33. What happens to the difference in In earnings between a worker with 10 years of experience and a worker with 0 years of experience? At: what level of experience are earnings maximized? What is the intuition for these results? e) A labor economist collected data 'om the March CPS between 2001 and 200? and estimated the following Mincer equations: Men: In}: = '80,\" + 0.11 educ + 0.0333 exp 0.00056 exp2 + ym'X Women: 1ny = :3.\" + 0.123 edw: + 0.0129 exp 0.0000? exp2 +ny What are the implied values of p, M0) and n for men and women? Do these accord with your intuition