The textbook discusses in Section 6–5 some strategies for correcting for ability bias when trying to estimate the rate of return to education.

(a) What is the main argument for why using data on identical twins can control for ability bias? What problem arises if most pairs of identical twins pursue different levels of education? What problem arises if most pairs of identical twins pursue the same level of education?

(b) What is the main argument for why using certain birthdates can control for the bias? Do you think this method will be better as identifying the rate of return to different years of high school education or college education? Why?