Conduct a simple linear regression analysis to examine the relationship between ‘education’ (the independent variable) and ‘wage’ (the dependent variable). Using the Excel data file, prepare a 2000 word report using the following structure: Purpose Background Method Results Discussion Recommendations In preparing your report you must address the following questions: (a) Obtain summary statistics and histograms for the variables WAGE and EDUC. Discuss the data characteristics. (b) Estimate the linear regression WAGE = β1 + β2EDUC + ε and interpret the slope. (c) Calculate the residuals and plot them against EDUC. Are any patterns evident and, if so, what does this mean? (d) Estimate the quadratic regression WAGE = α1 + α2EDUC2+ ε and interpret the results. Estimate the marginal effect of another year of education on wage for a person with 12 years of education, and for a person with 14 years of education. Compare these values to the estimated marginal effect of education from the linear regression in part (b).

1. Report on Linear regression analysis of Education Vs Wage
Conduct a simple linear regression analysis to examine the relationship
between ‘education’ (the independent variable) and ‘wage’ (the
dependent variable).
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Abstract
The nexus between wage and education has been a matter of interest for researchers in the
field of labor economics for a stint period (Newman, Couturier, & Scurry, 2010). With
graduation of time, the labor force for any organization has been started to be considered as
another form of capital, i.e. human capital (Machlup, 2014). Now productivity of a capital
comes from its applicability, and in the case of human capital, applicability, suitability, and
skill come with the level of education. If we move up the value chain of any organizations, it
can be easily seen that the level of skill required for performing an operation rises, and so as
the decision making power. Without having adequate education, a perfect mix of skill can
never be attained, and this is a factor, which decides one’s position in an organization, and so
as the wage level (Autor, Katz, & Kearney, 2008). Therefore, there is a possible nexus
between education and wage.