Question

Let kids denote the number of children born to a woman, and let educ denote years of education for the woman. A simple model relating fertility to years of education is 3. where ui is the unobserved error. a. What kinds of factors are contained in u? Are these likely to be correlated with the level of education? Do you expect the sign of the slope parameter to be positive or negative? Why? b.

Answer 1

i) factors contained in u are :

Economic factors:

a) Income earned by woman

b) income earned by husband

c) family's wealth

d)Expected future income

Social factors:

a)Area where family living(urban /rural)

b)Current marriage status(whether divorced)

c)religion

d) husbands education

yes some of factors are likely correlated with education of woman as generally educated men marry educated woman . so factor like education of husband is correlated etc..,

b)

we expect sign to be negative

as more educated the woman is, less children would she want .   {because of increasing population }