Compare the first regression estimate in Problem 2 with the regression estimate in Problem 4. a. Is
Question:
Compare the first regression estimate in Problem 2 with the regression estimate in Problem 4.
a. Is there an omitted variable bias when the full-time variable is not included? Explain.
b. What can be said about the correlation between age and full-time employment? Explain.
Problem 2
Suppose that a least squares regression yields the following estimate:
where W is the hourly wage rate (in dollars)
and A is the age (in years).
A second regression from another group of workers yields this estimate:
Problem 4
Suppose you have information on which of the 13 randomly selected teenage workers in the fast-food industry worked part-time and which worked fulltime.
Variable Fi is equal to 1 if the worker is employed full time, and it is equal to zero otherwise. With this information, you estimate the following relationship between wages, age, and full-time employment:
Step by Step Answer:
Modern Labor Economics Theory And Public Policy
ISBN: 9780132540643
11th Edition
Authors: Ronald Ehrenberg, Robert Smith