You are interested in looking at the returns to experience (howmuch wages go up for each additional year a person works). Thereare several possible models you can run. Answer the questionsrelated to the following models. Please note these values are notcalculated from actual data.
wagei=10+6.2*experiancei+10*health+yXi+Ei
health is an indicator if an individual works in the healthcareindustry. It is one if the person works in healthcare and zero ifthey work in a different industry.
a. How much would you expect your wage to go up by if you had anadditional year of experience and worked in the health sector?
b. How much would you expect your wage to go up by if you had anadditional year of experience and worked in an industry that wasnot health related?
c. How much would you expect your wage to go up by if you had anadditional four years of experience and worked in the healthsector?
d. In the output of the regression STATA indicates the p valuefor health is 0.03. At a 5% significance level does working in thehealthcare industry have an impact on wages?
