In a conversation, your friend tells you the following. "Government training programs target close to three million people per year. Given all the spending, if the government knew anything about training, the only poor adults left would be those unable or unwilling to work."

(a) Write down a regression equation, where schooling is measured in years of education and is the independent variable, and earnings are measured in dollars and are the dependent variable. Interpret the regression coefficient. Note: Pay attention to units in your answer.

(b) Define the "returns to education" (or "returns to schooling") term, that was discussed in class. How is it different from your interpretation of the regression coefficient in (a)?

(c) What is the agreed-upon returns to education in the United States? Note: List the number, and also interpret it (say what it means using the right units).

(d) In 1999, on average $6,500 was spent per pupil on primary and secondary public education. How much does the government need to spend per person to generate an increase in earnings of 12 percent from training programs? Note: Show your work.

(e) Do you agree or disagree with your friend's statement about government training programs? Explain why. Note: To answer this, you need to use information from parts (a)-(d).