3. Consider Gruber's empirical analysis of the effect of state legislation requiring that firms include costs associated with pregnancy and childbirth in employer-provided health insurance policies on the hourly wages of women of child-bearing age. a) How does he construct his FD estimator of the effect of interest? Explain. b) What is the identifying assumption (the thing that you have to believe in order to be convinced that this is a credible estimate of the causal effect of interest)? c) How does he construct his DD estimator of the effect of interest? Explain. d) What is the identifying assumption (the thing that you have to believe in order to be convinced that this is a credible estimate of the causal effect of interest)? TABLE 3-DDD ESTIMATES OF THE IMPACT OF STATE MANDATES ON HOURLY WAGES Before law After law Time difference Location/ year change change for location A. Treatment Individuals Married Women, 20-40 Years Old. Experimental states 1.547 1.513 -0.034 (0.012) (0.012) (0.017) (1,400] [1,496] Nonexperimental states 1.369 1.397 0.028 (0.010) (0,010) (0.014) [1,480) [1,640] Location difference at a point in time: 0.178 0.116 (0.016) (0,015) Difference-in-difference: -02062 (0 0Z2) B. Control Group: Over 40 and Single Males 20-40- Experimental states 1.759 1.748 -0.011 (0.007) (0.007) (0.010) (5,624] [5,407] Nonexperimental states 1.630 1.627 -0.003 (0,D07) (0.007) (0.010) [4,959] [4,928] Location difference at a point in time: 0.129 0.121 (0.D10) 0.010 Difference-in-difference: -010OS: (0 014) DDD: - 0.054 (0 026)