PROBLEM 5RP

Answer Problems 1–12 without referring back to the text. Fill in the blanks or answer true or false.

An example of a nonlinear third-order differential equation in normal form is_________

Labor Economics Problem Set 3: Mincer Regression a) By calculating Mincer Regression for men, I found their average wage to be $25 Equation: 7 + 1.25(12 years of education)+ standard error (3) = $22 As for women, their wages are $16 which is 6 dollars lower. Equation: 6 + 1.0(10 years of education)= $16. b) Using the Oaxaca Decomposition method, I have come up with these formulas: Difference in Raw Differentials: log(22)-log(16)= .14. Difference Due to Discrimination: (7-6)+(1.25-1.0)(10)= 3.5 or log(3.5)= .54 Difference due to Education: 1.25(12-10)= 2.5 or log(2.5)= .39 Since aW is less than aM ( 1.0 < 1.25) and the difference is greater than 0, there is discrimination based on gender. c) The Oaxaca Decomposition is a method created by two economists