Question

A large company is accused of gender discrimination in wages. The following model has been estimated from the company/k human tesioutce information WAGE = 12+0.8FDU+0.5RXPER−2FRMALE etse constart on average, hew much would wage increase if the yoars of editation increases by 5 years?

a 411,3
b. 35
d. 50.8

Answer 1

The wage would increase by 2.5 units on average for each additional year of education.

Step-by-step explanation:

The given question asks us to determine how much the wage would increase on average if the years of education increase by 5 years.

From the information provided, we have the following regression model: WAGE = 12 + 0.8FDU + 0.5RXPER - 2FRMALE. This model represents the relationship between wages and education, work experience, and gender.

To calculate the increase in wage with a 5-year increase in education, we need to consider the coefficient of RXPER (years of education) in the model, which is 0.5. Therefore, the wage would increase by 0.5 * 5 = 2.5 units on average for each additional year of education.