Question

I need solution for this issue with all the details, and help me with all the details? BR/H

Q.) Consider a government that contemplates extending the mandatory school system from nine years to ten years in primary school. You are now asked to give recommendation about the implementation and are thinking about estimating the model:

Yi = b0 + b1 schi + ei

Where Yi is the outcome (e.g. wage) of individual i, and schi is the years in school of the same individual. ei is an error term.

a) Illustrate mathematically and in words why estimating this model can give rise to Omitted variable bias.

b) If you had no financial or ethical restrictions, explain what research design you would use to uncover b1?

c) Explain the research design use in their paper to estimate b1?

Answer 1