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# (Solved): A researcher estimated the following regression: hourlywage \ i = 0.49 (0.12) 2.14 (2.57) minori ...

A researcher estimated the following regression: hourlywage \ i = 0.49 (0.12) ? 2.14 (2.57) minorityi + 1.49 (1.32) log (experiencei ), n = 1500, R 2 = 0.49. where hourlywage is the hourly wage per hour, measured in GDP per hour, minority is a dummy variable of whether the worker is of a minority background, and log(experience) is the logarithm of the number of years of experience. The robust standard errors are reported in parentheses. The regression uses a representative sample from the 2000 UK census. 1. (10 marks) Consider the following OLS estimation of a model to explain the labour demand of 500 large UK companies after the Covid pandemic using fn ancial data in 2023, all variables are calculated at the end of the year: (a) (5 marks) Can we interpret the coeffcient estimate on minority as the causal evidence of racial discrimination in the labour market? In your answer, clearly interpret the estimate and comment on its sign. (b) (5 marks) A colleague suggests including a variable Outo fCollege which captures how many years since the worker graduated from their highest degree. Is this suggestion sound? Explain

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