Hi all,
I am running a regression on logged hourly pay and was wondering how to test whether I should include higher power terms of continuous variables or not. The continuous variables I have are both measured in years, experience and tenure. I have noticed it's common to include age & age squared to account for decreasing marginal returns, and was wondering if there's a way to check whether to include tenure and/or experience as squared terms too. I have plotted a two-way scatter graph between hourly & tenure then experience but can't see a clear relationship.
Thank you for your time, I really appreciate it!
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