Consider the following OLS regression line obtained from a
random sample of 500 workers: = 0.3 + 0.1 educ +
0.005 exper + 0.02 tenure (1), where wage is hourly wage
(measured in dollars), educ is years of formal education, exper is
years of labor market experience and tenure is years with the
current employer.

Consider the following OLS regression line obtained from a
random sample of 500 workers: = 0.3 + 0.1 educ +
0.005 exper + 0.02 tenure (1), where wage is hourly wage
(measured in dollars), educ is years of formal education, exper is
years of labor market experience and tenure is years with the
current employer. Which of the following statements is correct?
According to equation (1), the predicted log(wage), when
educ = 0, exper = 0 and tenure = 0, is 0.3—which is not
meaningful.
According to equation (1), holding exper and tenure fixed,
another year of education is predicted to increase wage by
10%.
According to equation (1), if we choose two workers, A and
B, and these workers have the same levels of experience
and job tenure, but Worker A has one more year of formal
education than Worker B, then we predict Worker A to have