Question
plz help to solve questions c and d , i know how to deal with a and b A group of policy advisors for the
plz help to solve questions c and d , i know how to deal with a and b
A group of policy advisors for the NSW Government is interested in how wages differ for different groups of workers. You have been hired as a consultant to prepare a report. To investigate the issue, you survey 5,000 employees and gather data on their wages (in dollars), education (in years) as well as an indicator for gender.
Note: It is important that you define any variables you use in answering the questions below.
1) [3 marks] Write an equation that would allow you to estimate the associated effects of education on wages, while controlling for other factors. You should be able to make statements such as Having one more year of education is estimated to change a persons wage by x dollars.
2) [4 marks] Propose a regression model that would allow you to test whether education is associated with different effects on the wages of men versus women. How would you test the hypothesis that education affects the wages of women and men differently?
3) [4 marks] Now suppose that the NSW Government is interested in the effects of education on wage growth. Write an equation that would allow you to estimate the effect of education on wage growth. You should be able to make statements such as Having one more year of education is estimated to change a persons wage growth by x percent.
4) [4 marks] How would you modify the model in part (3) to estimate the elasticity of education on wages? Explain in detail how you would test the null hypothesis that the estimated elasticity of wages with respect to education is 1.
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