Question

A regression of hourly wage for females on years of schooling (educ), experience (exper), hours worked (hrswk), and marital status (married-1), based on the dataset cps4 yielded the following equation: 8. wage18.3+2.15 educ+ 0.105 exper+ 0.0827 hrswk+ 0.815 married (s.e.) (1.6) (0.106) (0.0151) (0.0242) (0.403) n 2443, R 0.242332

what is the predicted difference in hourly wage between a married and a single female? Is this difference significant? Please provide evidence.

Answer 1

estimated of slope of married/single women = 0.815

so, predicted difference in hourly wage between a married and a single female = 0.815

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std error of slope of married variable = 0.403

Ho:ß = 0

Ha:ß ╪ 0

n =2443

alpha,α = 0.05

estimated slope=0.815

std error = 0.403

t-test statistic = t = estimated slope / std error =2.0223

Df = n - 2 =2441

p-value = 0.0433    [excel function: =t.inv.2t(0.05,2441) ]

since, p-value <α=0.05, reject Ho,

jence, this difference is significant at α=0.05