Persico, Postlewaite, and Silverman (2004) analyzed data from the National Longitudinal Survey of Youth (NLSY) 1979 cohort to assess the relationship between height and wages for white men. Here we explore the relationship between height and wages for the full sample, which includes men and women and all races. The NLSY is a nationally representative sample of 12,686 young men and women who were 14 to 22 years old when first surveyed in 1979. These individuals were interviewed annually through 1994 and biannually after that. Table 4.7 describes the variables from heightwage.dta we'll use for this question.

(a) Create a scatterplot of adult wages against adult height. What does this plot suggest about the relationship between height and wages?

(b) Estimate an OLS regression in which adult wages is regressed on adult height for all respondents. Report the estimated regression equation, and interpret the results, explaining in particular what the \(p\) value means.

(c) Assess whether the null hypothesis that the coefficient on height81 equals 0 is rejected at the 0.05 significance level for one-sided and for two-sided hypothesis tests.

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TABLE 4.7 Variables for Height and Wage Data in the United States Variable name wage96 height85 Description Hourly wages (in dollars) in 1996 Adult height: height (in inches) measured in 1985