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) In this problem we will study a canonical question in labor economics: the labor-market returns to education. We'll use wage2.dta, a dataset on wages
) In this problem we will study a canonical question in labor economics: the labor-market returns to education. We'll use wage2.dta, a dataset on wages and education for a sample of men. The relationship we want to study is 2 ln() = 0 + 1 + (1) (a) (5p) Run this regression by OLS. Comment on the coefficient on educ. What prevents you from giving it a causal interpretation? (b) (5p) To overcome some of these problems, let's use the number of siblings (the variable sibs in the dataset) as an instrument. When we d
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