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You are reading a research report where the authors run a regression for unemployment. They run the following regression: = 0 + 1 + 2

You are reading a research report where the authors run a regression for unemployment. They run the following regression: = 0 + 1 + 2 + 2 + 2 + 2 + 2 + Where Unemployed=currently unemployed Hours=hours currently working on job Earnings=weekly earnings from current job State=coded variable where 1=Alabama, ..., 50=Wyoming Midwest=Midwest region of the country (20 pts) What are some common model specification problems associated with this model

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