Consider the following data for men and women: Men Women Average Hourly Wage:$12.40 $9.90 Average Years of Work Experience: 14.3 9.5 If a regression estimates the return to experience for men, ?M, to be 0.25, how much of the average difference in wages can be attributed to differences in work experience and how much can be attributed to discrimination and/or unobservable characteristics?
A. $1.20 to differences in work experience; $1.30 to discrimination/unobservable characteristics
B. $1.30 to differences in work experience; $1.20 to discrimination/unobservable characteristics
C. $0.00 to differences in work experience; $2.50 to discrimination/unobservable characteristics
D. $1.50 to differences in work experience; $1.00 to discrimination/unobservable characteristics
E. $2.50 to differences in work experience; $0.00 to discrimination/unobservable characteristics
Answer: A
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