The coefficients are given by ln w = 11.7 + 0.05school ln w = 11.4 + 0.10school women men 1. Do women make more or less than men? What is the average difference in log wages between women and men? What do log differences approximate? 2. Depict on the graph a prediction for how much a man would make with the schooling of an average woman. 3. Use the regression equations, estimate the predicted log wage of the man with the schooling of an average woman. 4. Use (2) to graphically decompose the difference in average men’s log wages with average women’s log wages into a component due to schooling and an unexplained component. 5. Use (3) to algebraically decompose the difference in average women’s log wages with average men’s log wages into a component due to schooling and an unexplained component. 6. What fraction of the wage differences are unexplained? 7. Would your answer change if instead you predicted how much a woman would make with the schooling of an average man? Explain. 8. Is the data evidence of disparate treatment? Explain why or why not
The coefficients are given by
ln w = 11.7 + 0.05school
ln w = 11.4 + 0.10school
women men
1. Do women make more or less than men? What is the average difference in log wages between women and men? What do log differences approximate?
2. Depict on the graph a prediction for how much a man would make with the schooling of an average woman.
3. Use the regression equations, estimate the predicted log wage of the man with the schooling of an average woman.
4. Use (2) to graphically decompose the difference in average men’s log wages with average women’s log wages into a component due to schooling and an unexplained component.
5. Use (3) to algebraically decompose the difference in average women’s log wages with average men’s log wages into a component due to schooling and an unexplained component.
6. What fraction of the wage differences are unexplained?
7. Would your answer change if instead you predicted how much a woman would make with the schooling of an average man? Explain.
8. Is the data evidence of disparate treatment? Explain why or why not.
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