Answered: a) Explain ability bias. b) Discuss the…

a) Explain ability bias. b) Discuss the method of using data on identical twins to control for ability bias. c) Discuss the method of using certain birth dates to control for ability bias.

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter10: Labor Markets And Income Distribution

Section: Chapter Questions

Problem 14SQ

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Question

The textbook discusses some strategies for correcting for ability bias when trying to estimate the rate of return to education.

a) Explain ability bias.

b) Discuss the method of using data on identical twins to control for ability bias.

c) Discuss the method of using certain birth dates to control for ability bias.

The Textbook: Labor Economics, 8^th Edition, by George Borjas, published by McGraw-Hill.

Study of all the factors that contribute to the efficiency of the labor force. Labor economics helps in understanding the issues related to the functioning of the labor markets, workers safety, gender equity, job security, determination of fair wages, bargaining through trade unions and job satisfaction.

Expert Solution

Step 1

The rate of return to education or the yield is used in economics to understand the behavior of the people wanting education for different levels and varieties and can also serve as guidance to know the resources that can be allocated for educational purposes. The rate of return on education is used widely as one of the methods for understanding education from the economic perspective.

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