4.15 Does the return to education differ by race and gender? For this exercise use the file cps.dat. (This is alatge file with 4733 observations. If your software is a student version, you can use the smaller file cps-small.dat.)In this exercise you will extract subsampleso f observationsc onsistingo f (i) all males,( ii) all females,( iii) all whites.

(iv) all blacks, (v) white males, (vi) white females, (vii) black males, and (viii) black females.

(a) For each sample partition, obtain the summary statistics of WAGE.

(b) Avariable's cofficient of variation is 100 times the ratio of its sample standard deviation to its sample mean. For a variable y it is

(T..

It is a measure of variation that takes into account the size of the variable. What is the coefficient of variation for WAGE within each sample partition?

(c) For each sample partition estimate the log-linear model ln(WAGE): Br * B2EDUC * e What is the approximate percentage return to another year of education for each group?

(d) Does the model fit the data equally well for each sample partition?

(e) For each sample partition, test the null hypothesis that the rate of return to education is lOVo against the alternative that it is not, using a two-tail test at the 5Vo level of significance.

CV = 100x