2. This question is about the paper \"Labor Market Returns to Two and FourYear Colleges\

2. This question is about the paper "Labor Market Returns to Two- and Four-Year Colleges" , NBER Working Paper 4268 by Kane and Rouse (1993), who investigate the difference in wages between individuals who went to a two-year college versus those who went to a four-year college. The relationship of interest is: Yi = [30 + educil -k racet2 + experi3 + parti4 + ut, where Yi are log hourly wages for individual i, educi is a binary variable that equals 1 if individual i went to a four-year college, and equals 0 if they went to a two year college (everybody in the 1 sample went to one of the two), racq is individual i's race, experi is the individual's number of years with work experience, and parti is an indicator variable that is 1 when individual i's job is part-time. a) b) c) Why do we care about the causal effect of educi on Yi, as opposed to the correlation between educi and Yi? What is in ut? Give examples specific to the context of this question. Explain why E(uileduct) 0.