Considering Y^M = 40, 000 and Y^F = 28, 000

question 3

Multiple Choice

Considering Y^M = 40, 000 and Y^F = 28, 000, Y^M and Y^F are average earnings for males and females respectively. The following are estimated simple human capital earning functions: ln Y^M = 9.2 + 0.1S^M, S^M = 14; ln Y^F = 9.4 + 0.07SF; S^F = 12; S^M and S^F are average school years for male and female respectively.
-Using Oaxaca decomposition, the unexplained differentials are (in logarithms) ?

• A) 0.36
• B) 0.85
• C) 0.20
• D) 0.70
• E) 0.16

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