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3.5 On the basis of the output in Figure 3.4, comment on the predictive signicance of the model. [2 marks] 3.6 On the basis of the output in Figure 3.5, state and analytically discuss the regression equation [5 marks] representing the relationship between 'years of education' and 'Annual eamings'. Over the past five decades there has been considerable interests in assessing the effectiveness with which education fosters increased earnings (Boshara. Emmons, 8: Noeth, 2015; Judge ef al., 2010; Neenan 8. Orthner. 1996). The relationship between education and income is strong and education is often referred to as an investment in human capital. People invest in human capital for similar reasons people invest in nancial assets. including to make money. In general. those with more education earn higher incomes. The higher income that results from a college degree is sometimes referred to as the college wage premium. Research shows that this premium has grown over time (Valletta. 2015). In addition, in general. the more skills people have. the more employable they are. As a result, workers with more education have a lower average unemployment rate than those with less education (Wolla & Sullivan, 2017). Despite the reported correlation between education and earnings. anecdotal evidence appears to suggest that education is being increasingly superseded by other human capital characteristics (Valletta, 2015). The earnings gap between people with a college degree and those with no education beyond high school has been growing since the late 1970s. Since 2000, however, the gap has grown more for those who have earned a post-graduate degree as well. The divergence between workers with college degrees and those with graduate degrees may be one manifestation of rising labour market polarization, which benets those earning the highest and the lowest wages relatively more than those in the middle of the wage distribution. The most common metric for assessing the benefits of a college education is the earnings advantage that it gives workers. There are other important benets as well, including job attributes such as more generous fringe benets and greater stability and autonomy. However. the earnings advantage is more easily measured and arguably the most important element from an economic and social perspective. As a young researcher with a keen interest in investigating the determinants of employee earnings, you are embarking on a study to examine the dynamics of the relationship between education and employee earnings in the financial services sector in the Western Cape province of South Africa. Your sample frame is a list of employees working in the nancial services sector in the Western Cape province. Having distributed survey questionnaires to 500 randomly selected employees on your sampling frame and you received 229 usable questionnaires from respondents. Table 5.1 is an excerpt of the data collected from the 229 respondents. Table 3.1: Excerpt of data mm the 229 \"spam Respondmt's ID Tears of education Annual Earnings, R 10001 10002 10003 10004 10005 10006 1000? 1000B 9 540 000