Q3.

a) The mean column of the above table indicates the fraction of workers that represent
each category. Thus:
- Fraction of males in the dataset: 0.663
- Fraction of workers in agriculture: 0.178
- Fraction of workers in manufacturing:0.176
- Fraction of workers in services:0.646
- Fraction of workers speaking an indigenous language: 0.151

b) Looking at the results of the regression analysis, we can see that the point estimate for
the difference in log daily wages for workers in services relative to all other economic
activities is 0.435. This means that on average, service workers earn 43.5% more than
non-service workers. This value is statistically significant at the 1% level, which means it
is highly accurate.

c) After conducting multiple regression on wages, we observe that the F-stat is similar to
the previous regression and is statistically significant at the 1% level indicating that we
can reject the null hypothesis that these variables do not affect the log of daily wages. All
variables are statistically significant at the 1% level except the state, indicating that the
observed services wage productivity cannot be explained due to the fact that service
workers are more likely to work in states with higher wages. The adjusted R squared
value indicates that about 24.89% of variation in the log of daily wages can be attributed
to the variables included in our multiple regression. The coefficient on SE indicates that
service workers on average earn 27.6% more per day compared to other types of
workers, keeping all other variables constant. This indicates that service workers tend to
earn more compared to other workers. The coefficient on sex indicates that women earn
about 31% less than men, which explains the fact that service workers earn more
because service workers tend to hire more male workers. The coefficient on education
indicates that for every additional year of education, there is a 8.06% increase in daily
wages. Hence, increased service productivity could be explained by the fact that service
workers tend to be more educated. The coefficient on age indicates that for every year
older a worker gets, the wage increases by 0.9%. Therefore, increased wage
productivity for service workers could be due to the fact that service workers are older.
Indigenous language has a coefficient of -0.337 indicating that workers that speak
indigenous languages, tend to have wages that are 33.7% lower on average. This
indicates that service workers tend not to be of indigenous descent. The coefficient on
state is -0.0027 but it is not significant enough to explain the increased wage productivity
of service workers.
d) The regression result is statistically significant at the 1% level and indicates that on
average service workers receive 224% more years of schooling than non service
workers.