QUESTION 5

The following information relates to Questions 5-6.

The estimated regressions in the following table were computed using data on employees in a developing country.The data set consists of information on over 10,000 full-time, full-year workers. The highest education achievement for each worker is either a high school diploma or no high school diploma. The workers' ages range from 25 to 40 years. The dataset also contains information on the region of the country where the person lives, gender and age. For the purposes of these exercises, let:

AWE = logarithm of average weekly earnings (in 2007 units)

High School = binary variable (1 if high school diploma, 0 if no high school diploma)

Male = binary variable (1 if male, 0 if female)

Age = age (in years)

North = binary variable (1 if Region = North, 0 otherwise)

East= binary variable (1 if Region = East, 0 otherwise)

South= binary variable (1 if Region = South, 0 otherwise)

West= binary variable (1 if Region = West, 0 otherwise)

Results of Regressions of Average Weekly Earnings on Gender and Education Binary Variables and Other Characteristics Using 2007 Data from a Developing Country Survey Dependent variable: log average weekly earnings (AWE). Regressor (1) (2) (3) High school graduate (X]) 0.352 0.373 0.371 (0.021) (0.021) (0.021) Male (X2) 0.458 0.457 0.451 (0.021) (0.020) (0.020) Age (X3) 0.011 0.011 (0.001) (0.001) North (X4) 0.175 (0.037) South (Xs) 0.103 (0.033) East (X7) -0.102 (0.043) Intercept 12.84 12.471 12.390 (0.018) (0.049) (0.057) Summary Statistics and Joint Tests F-statistic for regional effects = 0 21.87 SER 1.026 1.023 1.020 R2 0.0710 0.0761 0.0814 n 10973 10973 10973Large-Sample Critical Values for the t-statistic from the Standard Normal Distibution Significance Level 10% 5% 1% 2-Sided Test ( # ) Reject if It) is greater than 1.64 1.96 2.58 1-Sided Test (>) Reject if t is greater than 1.28 1.64 2.33 1-Sided Test (