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You Have Estimated an Earnings Function, Where You Regressed the Log

question 55

Essay

You have estimated an earnings function, where you regressed the log of earnings on a set of continuous explanatory variables (in levels)and two binary variables, one for gender and the other for marital status. One of the explanatory variables is education.
(a)Interpret the education coefficient.
(b)Next, specify the binary variables and an equation, where the default is a single male, without allowing for interaction between marital status and gender. Indicate the coefficients that measure the effect of a single male, single female, married male, and married female.
(c)Finally allow for an interaction between the gender and marital status binary variables. Repeat the exercise of writing down the various effects based on the female/male and single/married status. Why is the latter approach more general than the former?


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A group of individuals born within a specific period, who experience particular social and historical events at similar stages of life, influencing their attitudes and behaviors.

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A perspective that suggests societies progress linearly from traditional to modern states, focusing on economic and technological development.

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