Question: 5. Suppose that schooling (s) is the only variable that affects earnings, and that the equations giving the weekly salaries of male and female workers

5. Suppose that schooling (s) is the only variable that affects earnings, and that the equations giving the weekly salaries of male and female workers are given by: wM = 725 + 120s WF = 630 + 85s On average, men have 14.5 years of schooling and women have 13.2 years of schooling. a. What is the malefemale wage differential in the labor market? b. Using the Oaxaca decomposition, calculate how much of this wage differential is due to discrimination

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