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{"ops":[{"insert":"Log (earnings) =\u00a04.016\u00a0+\u00a00.092 . educi\u00a0\u00a0+ 0.079 .expei +\u00a0\u00a00.002 . experi 2\u00a0\n\u00a0( 0.222)\u00a0\u00a0( 0.008) \t( 0.025) \t \t(0.001)\nlog ( earnings )I\u00a0\u00a0= \u03b21 + \u03b2 2 \u22c5 educI\u00a0\u00a0+ \u03b2 3 \u22c5 experI\u00a0\u00a0\u2212 \u03b2 4 \u22c5 experI2\u00a0+ \u03b25 \u22c5 abilityI\u00a0\u00a0+ \u03b5I\u00a0.\u00a0\n\u00a0In this regression, what do you expect the sign of \u03b25 (the coefficient on ability) to be?\u00a0\n\u00a0a). \tWhat do you think the sign of the correlation between ability and years of education?\u00a0\n\u00a0b). \tIf we estimate the\u00a0regression\u00a0function\u00a0with\u00a0ability\u00a0included,\u00a0do\u00a0you think\u00a0that\u00a0the\u00a0\nestimated value of \u03b2 2 will be greater or less than what it was in the regression without\u00a0 ability? Explain.\n\u00a0\n\n"}]}
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