What is the best explanation for the ability bias in estimating the returns to education?

a. Education can not be measured properly because a lot of education is informal.

b. People who are driven to succeed often quit school to start their own business.

c. More intelligent people are likely to obtain more schooling, and such people are more productive in the labor market thus earning higher wages.

d. More hard working people are less likely to obtain schooling because they earn decent wages.

Which of the following is NOT one of the benefits of educational investment?

a. reduced satisfaction from participation in nonmarket activities

b. more interesting and challenging work

c. more desirable working conditions

d. a more stable employment situation

Empirical studies mentioned in this chapter find that

a. a reduction in the tuition costs increases college attendance and completion.

b. the age- earnings profiles have become flatter for women over time.

c. ability bias is large and its direction is ambiguous.

d. returns to a year of education are around 20%.

If a person expects lower returns from education due to career interruptions, this person will choose to invest ____ in human capital.

a. zero

b. less

c. more

d. the same as others