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Suppose the hourly wages for male workers, is given by Wim = 7 + 0.75Xim and the wages for female workers is given by WiF= 6 + 0.60XiF, where w is the wage and X is the years of education.
(a) Suppose the average years of education for male and female workers are 14 years and 15 years, respectively. What is the average wage for male workers? Female workers?
(b) What is the wag gap/differential between male and female workers? How much of the gap is explained by differences in educational characteristics? How much of the gap is not explained by differences in educational characteristics?
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