The equations for the weekly earnings of men and women are as follows where, S, represents years of Schooling.
WM = 500 + 100S
Wf = 350 + 75S
Suppose that women have, on average, 16 years of schooling; and men have on average 14 years of schooling. A social scientist proposes to use the unexplained portion of the mean differences in wages as evidence of discrimination. Are they correct? Why or why not?
No, they are not right. We can see in the two equations that the intercept as well as the coefficient of Schooling is higher for men than for women. This already points to discrimiination, so the claim that discrimination can be measured using unexplained variations in mean is incorrect.
The equations for the weekly earnings of men and women are as follows where, S, represents years of Schooling.
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