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Exercises 255

6.2 Using the regression results in column (1):

a. Do workers with college degrees earn more, on average, than workers
with only high school degrees? How much more?

b. Do men earn more than women, on average? How much more?

6.3 Using the regression results in column (2):

a. Is age an important determinant of earnings? Explain.
b. Sally is a 29-year-old female college graduate. Betsy is a 34-year-old

female college graduate. Predict Sally’s and Betsy’s earnings.

6.4 Using the regression results in column (3):

a. Do there appear to be important regional differences?
b. Why is the regressor West omitted from the regression? What would

happen if it were included?

Results of Regressions of Average Hourly Earnings on Gender and Education
Binary Variables and Other Characteristics, Using 2012 Data from the Current
Population Survey

Dependent variable: average hourly earnings (AHE).

Regressor (1) (2) (3)

College 1X12 8.31 8.32 8.34
Female 1X22 - 3.85 - 3.81 - 3.80
Age 1X32
Northeast 1X42 0.51 0.52
Midwest 1X52 0.18
South 1X62 - 1.23
Intercept - 0.43
17.02 1.87 2.05

Summary Statistics

SER 9.79 9.68 9.67
R2 0.162 0.180 0.182
R2
n 7440 7440 7440