Why do labor economists often find it difficult to estimate the ceteris paribus return to education, in terms of wage, using non-experimental data?
A)Education level in non-experimental data is probably dependent on other omitted factors that also affect wage.
B)In a non-experimental setting, education level is often difficult to measure.
C)Wage is often reported unreliably and inaccurately.
D)Experience, another factor that also affects wage, is generally difficult to measure.

Question

Quizplus · Accepted Answer

Labor economists often find it difficult to estimate the ceteris paribus return to education, in terms of wage, using non-experimental data because education level in non-experimental data is probably dependent on other omitted factors that also affect wage. These omitted factors could include natural ability, social connections, and personal motivation, among other things, which could lead to biased estimates of the returns to education.

Why Do Labor Economists Often Find It Difficult to Estimate