Read the box The Economic Value of a Year of Education: Homoskedasticity or Heteroskedasticity? in Section 5.4.
Question:
Read the box "The Economic Value of a Year of Education: Homoskedasticity or Heteroskedasticity?" in Section 5.4. Use the regression reported in Equation (5.23) to answer the following.
a. A randomly selected 30 -year-old worker reports an education level of 16 years. What is the worker's expected average hourly earnings?
b. A high school graduate (12 years of education) is contemplating going to a community college for a 2-year degree. How much are this worker's average hourly earnings expected to increase?
c. A high school counselor tells a student that, on average, college graduates earn \(\$ 10\) per hour more than high school graduates. Is this statement consistent with the regression evidence? What range of values is consistent with the regression evidence?
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