- Please Answer All The Questions Thanks 1 (49.34 KiB) Viewed 59 times
Please answer all the questions. Thanks.
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answerhappygod
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Please answer all the questions. Thanks.
Please answer all the questions. Thanks.
Question 5 (20 marks) Suppose we are interested in understanding the effect of increasing the minimum wage on employment rates. Suppose Country 1 had a constant minimum wage of $9 from 2000-2010. Country 2 had a minimum wage of $10 from 2000-2007, and in December 2007, raised its minimum wage to $11. In January of each year, the governments collect data on the employment rate in both countries. 1. What method would you use to examine our question of interest? 2. Write out the regression you would run, and define all terms. 3. State what the identifying assumption is. In other words, what assumption needs to hold in order for your strategy to isolate the causal effect of interest? 4. How could you use the data that you have to assess whether the identifying assumption holds (hint: can you check for differential pre-period trends in the treatment and control groups)?
Question 5 (20 marks) Suppose we are interested in understanding the effect of increasing the minimum wage on employment rates. Suppose Country 1 had a constant minimum wage of $9 from 2000-2010. Country 2 had a minimum wage of $10 from 2000-2007, and in December 2007, raised its minimum wage to $11. In January of each year, the governments collect data on the employment rate in both countries. 1. What method would you use to examine our question of interest? 2. Write out the regression you would run, and define all terms. 3. State what the identifying assumption is. In other words, what assumption needs to hold in order for your strategy to isolate the causal effect of interest? 4. How could you use the data that you have to assess whether the identifying assumption holds (hint: can you check for differential pre-period trends in the treatment and control groups)?