Suppose That in Order to Estimate of the Average Effect

question 7

Multiple Choice

Suppose that in order to estimate of the average effect of participation in a job training program (train) on wage, you included controls for education (educ) , years of experience (exper) in your model: log(wage) = + + + + u . Which of the following is a reason why the coefficient, , might be biased?

• A)Exper is uncorrelated with train.
• B)Educ is likely correlated with both wage and train .
• C)Educ and exper are highly correlated with each other.
• D)There might be some other variable that is also correlated with both wage and train.

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