Paid family-leave is a policy that allows parents to take paid leave from work for some period after the birth of a new child.This policy is mandatory (and often government funded) in many Western countries, but in the US it is typically left up to the individual firm to decide.

Suppose that a researcher is interested in the effects of paid family-leave on the time that parents take off of work.She has individual-level data for employees at different firms in different years, including a measure of whether the firm offers paid family-leave (Policy)and the number of days the worker took off (Leave).

The researcher chooses to regressLeaveonPolicywith year fixed effects.Which of the following potential sources of bias does this procedure control for?

Group of answer choices:

(1) Firms that offer paid-leave policies employ workers with more education, and more educated workers are more likely to take time off of work.

(2) In more recent years, as attitudes around childbirth have changed, more firms have offered paid-leave policies and (because of these attitudes) workers have been more likely to take time off of work.

(3) In more recent years, some states have given tax credits to encourage more firms to offer paid family-leave. The states that has passed such policies are states in which workers are more likely to take time off after the birth of a child.

Both (1) and (2) above.

Both (1) and (3) above.

Both (2) and (3) above.