Pages 283-284 in Your Textbook Contain an Analysis of the "Return

question 8

Essay

Pages 283-284 in your textbook contain an analysis of the "Return to Education and the Gender Gap." Column (4)in Table 8.1 displays regression results using the 2009 Current Population Survey. The equation below shows the regression result for the same specification, but using the 2005 Current Population Survey. Interpret the major results. $\begin{array} { l } \widehat{\text { In eamings }} = 1.215 + 0.0899 \times \text { educ } - 0.521 \times \text { DFemme } + 0.0180 \times ( \text { DFemme } \times \text { educ } ) \\\text { (0.018) (0.0011) } \text { (0.022) } ( 0.0016 ) \\\\+ 0.0232 \times \text { exper } - 0.000368 \times \text { exper } 2 - 0.058 \times \text { Midwest } - 0.0098 \times \text { South } - 0.030 \times \text { West } \\( 0.0008 ) \quad \quad\quad \quad\text { (0.000018) \quad \quad\quad \quad\quad \quad} \text { (0.006) } \quad \quad\quad \quad\text { (0.0078) } \quad \quad\quad \quad( 0.0030 ) \\\end{array}$

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Definitions:

Aggregate Domestic Output

The total value of all goods and services produced within a country's borders in a specific time period.

Capital Goods

Long-term assets such as machinery, buildings, and equipment used by businesses to produce goods and services.

Economic Development

The process through which a nation improves the economic, political, and social well-being of its people.