Esmeralda is 16 years old and enrolled in her local high school. She must choose whether to spend the next 6 years working full-time or completing school. Suppose that if she drops out of high school to work full time, she can work as a full-time caregiver for wc per year. On the other hand, if she graduates from high school and earns a college degree, she can work as a nurse for wn per year. For simplicity, assume that schooling costs $M each year for six year.

a. Write a model that compares Esmeraldas present value of completing school with her present value of not completing school assuming a time horizon (T) and a discount rate of (r). You do not need to solve this model.

b. Using the Human Capital model above, please predict how the following changes will affect the likelihood that Esmeralda completes her school: i. Esmeralda now believes she will be able to have a longer time horizon T > T. Complete more schooling or less schooling (circle one). ii. Esmeralda now believes that her job opportunities with schooling are better wnurse > wnurse . Complete more schooling or less schooling (circle one). iii. Esmeralda receives a tuition reduction lower her cost of schooling c

c. Suppose researchers were interested in the impact of a new policy that effectively caused all three changes in part (b) above. They gathered data on school attendance, summarized in the chart below. Pre-Period (2005-2011) Post-Period (2012-2015) Difference Difference-inDifferences Control: Ineligible for DACA (citizens) 90% 92% _______ . Treated: Eligible for DACA (non-citizens) 86% 89% _______ _______i. Please fill in the difference-in-differences coefficients in the chart above. ii. In your own words, describe why the researchers need to collect data on a control group to understand the true causal impact. Please interpret the researchers estimates of how the policy affected school attendance for undocumented immigrants. Does this match with your predictions in part (b)?

what concept do you need?

c. Suppose researchers were interested in the impact of a new policy that effectively caused all three changes in part (b) above. They gathered data on school attendance, summarized in the chart below. i. Please fill in the difference-in-differences coefficients in the chart above. ii. In your own words, describe why the researchers need to collect data on a control group to understand the true causal impact. Please interpret the researchers' estimates of how the policy affected school attendance for undocumented immigrants. Does this match with your predictions in part (b)? c. Suppose researchers were interested in the impact of a new policy that effectively caused all three changes in part (b) above. They gathered data on school attendance, summarized in the chart below. i. Please fill in the difference-in-differences coefficients in the chart above. ii. In your own words, describe why the researchers need to collect data on a control group to understand the true causal impact. Please interpret the researchers' estimates of how the policy affected school attendance for undocumented immigrants. Does this match with your predictions in part (b)