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causation microeconomics Imagine researchers model the relationship between fertility and income as two structural equations. First, the number of children women have is predicted by

causation microeconomics

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Imagine researchers model the relationship between fertility and income as two structural equations. First, the number of children women have is predicted by k,- = om + 0:18,; | a3twins, (1) where k,- is the number of kids woman 2' has, 6,- is the woman's years of education, and twins,- indicates whether the woman has had twins. Second, a woman's hours worked per week 17.,- is modeled as hi : (80 + (811%4' 5281' (2) Angrist and Evans want to measure 61, the effect of additional children on a woman's hours worked. A. The researchers consider using education as an instrument for fertility to study hours worked. List the conditions for a good instrument given in class. Given these structural equations, would education be a good instrument? B. The authors consider using whether the family's last birth was twins as an instru ment for fertility. Does this instrument meet the conditions for a good instrument? C. In Angrist and Evans\" paper, they also use an instrument based on the number of boys and girls a family has already had to predict the future number of births. Explain this instrument. Rewrite our structural model equations to include this new instrument

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