5 Education and Earnings revisited (25 points) We have been talking for some time now about a model that tries to explain the differences in labor earnings across individuals with an array of variables, the most important of which we have assumed is education. Few people would argue against the fact that there is a correlation between education and earnings, but as economists our objective is to quantify the strength of the relationship. In this exercise you are going to use a data set called the NELS, you can nd information about this data set at: http:e'i'nces.ed.govi'surveysl'nels33!r This is a nationally representative sample of eighth-graders who were rst surveyed in the spring of 1988. A sub-sample of these respondents, were then resurveyed through four follow-ups in 1990, 1992, 1994, and 2000. 0n the questionnaire, students reported on a range of topics including: school, work, and home experiences; educational resources and support. For the three in-school waves of data collection (when most were eighth-graders, sophomores, or seniors}, achievement tests in reading, social studies, mathematics and science were administered in addition to the student questionnaire. You can download a sub-sample of this data, with more than 8,500 observations is in Excel format from the class webpage