You Have Learned That Earnings Functions Are One of the Most

Essay

You have learned that earnings functions are one of the most investigated relationships in
economics.These typically relate the logarithm of earnings to a series of explanatory
variables such as education, work experience, gender, race, etc.
(a)Why do you think that researchers have preferred a log-linear specification over a linear
specification? In addition to the interpretation of the slope coefficients, also think about
the distribution of the error term.