The return to education is defined as how much a person\'s earnings change for e

Question

The return to education is defined as how much a person's earnings change for each additional year of education. Using the following variables, write down the equation that you would need to estimate if you want to estimate a model that could tell you if the return to education was different for men and women. 8. earnings = annual earnings in dollars educ = number of years of education female = 1 if female,0 if male What was the fundamental research question that was being addressed in the Moving to Opportunity (MTO) paper that we read? Explain why the estimates reported in the paper represent an Intention to Treat effect. 9.

Explanation / Answer

8. Gender either male or female is a dummy variable. So to understand the return on education we should use the interaction variable female*education in the model.

Earnings = beta0+beta1*edu+beta2*edu*female

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