10.10 A researcher wants to estimate the determinants of annual earnings: age, gender, schooling, union status, occupation, and sector of employment.

The researcher has been told that if they collect panel data on a large number of randomly chosen individuals over time, they will be able to regress annual earnings on these determinant variables while using fixed effects to control for individual-specific time-invariant characteristics. What estimation problems is the researcher likely to run into if they use this strategy?