If Ability Is Positively Related to Schooling, Then Estimating the Returns

question 18

Multiple Choice

If ability is positively related to schooling, then estimating the returns to education directly from the wage-schooling profile will likely

• A) underestimate the return to schooling.
• B) overestimate the return to schooling.
• C) underestimate the average wage.
• D) overestimate the average wage.
• E) underestimate the average discount rate.

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Definitions:

Neuroticism

Personality trait characterized by anxiety, fear, moodiness, worry, envy, frustration, jealousy, and loneliness.

Openness

Refers to one's willingness to consider new ideas, be open to diverse experiences, and exhibit transparency in thoughts and actions.

Extroversion

A personality trait characterized by sociability, talkativeness, assertiveness, and high levels of emotional expressiveness.

The Big Five Model

A personality framework consisting of five broad dimensions used to describe human personality: openness, conscientiousness, extraversion, agreeableness, and neuroticism.