A researcher wonders whether males get paid more, on average, than females at a large firm. She interviews 50 employees and collects data on each worker's hourly wage (Wage), years of higher education (EDUC), experience (EXPER), age (AGE), and gender of the employee (d equals 1 if male). A portion of the data is shown; the entire data set can be found on the text website, labeled Hourly Wage.
a. Estimate: Wage = β0 + β1 EDUC + β2EXPER + β3AGE + β 4d + ε.
b. Predict the hourly wage of a 40-year-old male employee with 10 years of higher education and 5 years experience. Predict the hourly wage of a 40-year-old female employee with the same qualifications.
c. Interpret the gender coefficient. Is the gender variable significant at the 5% level? Does the data suggest that gender discrimination exists at this firm?