Let wage denote hourly wages, educ denote years of education, and define the dummy variable: 1 D = if educ > 12 if educ < 12 i.e. we can think of D as a dummy variable indicating graduation from high school. Suppose we want to test the null hypothesis that the marginal return to education for every year after high school is the same as the marginal return to education for each year before high school (against the alternative that they are different). Which model and test would accomplish this goal?

Let wage denote hourly wages, educ denote years of education, and define the dummy variable: 1 D = if educ > 12 if educ < 12 i.e. we can think of D as a dummy variable indicating graduation from high school. Suppose we want to test the null hypothesis that the marginal return to education for every year after high school is the same as the marginal return to education for each year before high school (against the alternative that they are different). Which model and test would accomplish this goal?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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