5. Suppose the following wage regression is run on a sample of black and Hispanic workers (whites are not included in the data set or in the wage regression):
Wage = b0 + b1*Hispanic + b2*Age
where the variables are as defined in class. Refer to the empirical results below when answering the questions.
Coefficients
Standard Error
t Stat
Intercept
-1.888
8.733
-0.216
Hispanic
1.356
0.857
1.582
Age
0.391
0.180
2.179
a) According to these regression results, do blacks earn less than Hispanics?
b) How much less would a 30-year old expect to earn on average than a 32-year old?
c) Which variables are statistically significant at the 95 percent confidence level?
d) Calculate the average wage of a 20-year old Hispanic.
e) Suppose blacks average 13.0 years of education and Hispanics average 12.5 years of education. What effect will re-running this regression including the education variable have on the Hispanic coefficient?
5. Suppose the following wage regression is run on a sample of black and Hispanic workers (whites are not included in the data set or in the wage regression):
Wage = b0 + b1*Hispanic + b2*Age
where the variables are as defined in class. Refer to the empirical results below when answering the questions.
| Coefficients | Standard Error | t Stat | |
| Intercept | -1.888 | 8.733 | -0.216 |
| Hispanic | 1.356 | 0.857 | 1.582 |
| Age | 0.391 | 0.180 | 2.179 |
a) According to these regression results, do blacks earn less than Hispanics?
b) How much less would a 30-year old expect to earn on average than a 32-year old?
c) Which variables are statistically significant at the 95 percent confidence level?
d) Calculate the average wage of a 20-year old Hispanic.
e) Suppose blacks average 13.0 years of education and Hispanics average 12.5 years of education. What effect will re-running this regression including the education variable have on the Hispanic coefficient?
