2. Kofi is interested in the effect of the introduction of the Free Senior High School...

 

Transcribed Image Text:

2. Kofi is interested in the effect of the introduction of the Free Senior High School (Free -SHS) in the Ghana on the unemployment rate (Number of unemployed/ Labour force) and applies a Difference-in-Difference design using Mali as a control group. He has data for two time periods, where in the first period there was no Free-SHS in both the Ghana and Mali, and in the second year in Ghana Free-SHS was introduced, but not in Mali. In order to estimate the effect of the effect of Free-SHS on unemployment, he estimates the following regression model: Unemployi = a + B₁Free SHS + B₂Time + P3 (Free SHS; * Time) + εi Where Free SHS, denotes treatment status (1 if Ghana, and 0 if Mali). The regression output is as follows: Variable Free SHS Time Free SHS Time α Coefficient -0.06 0.02 -0.03 0.24 a. What is the unemployment rate in Mali and Ghana at baseline on the basis of this estimation? b. Explain the effect of time on unemployment in both countries? Are the time effects the same across both countries? c. Based on the estimated regression output, explain the effect of Free- SHS on unemployment. d. Draw the Difference-in-Difference (DiD) graph for this evaluation, illustrating the baseline and follow-up differences in outcome. (3 MARKS EACH) 2. Kofi is interested in the effect of the introduction of the Free Senior High School (Free -SHS) in the Ghana on the unemployment rate (Number of unemployed/ Labour force) and applies a Difference-in-Difference design using Mali as a control group. He has data for two time periods, where in the first period there was no Free-SHS in both the Ghana and Mali, and in the second year in Ghana Free-SHS was introduced, but not in Mali. In order to estimate the effect of the effect of Free-SHS on unemployment, he estimates the following regression model: Unemployi = a + B₁Free SHS + B₂Time + P3 (Free SHS; * Time) + εi Where Free SHS, denotes treatment status (1 if Ghana, and 0 if Mali). The regression output is as follows: Variable Free SHS Time Free SHS Time α Coefficient -0.06 0.02 -0.03 0.24 a. What is the unemployment rate in Mali and Ghana at baseline on the basis of this estimation? b. Explain the effect of time on unemployment in both countries? Are the time effects the same across both countries? c. Based on the estimated regression output, explain the effect of Free- SHS on unemployment. d. Draw the Difference-in-Difference (DiD) graph for this evaluation, illustrating the baseline and follow-up differences in outcome. (3 MARKS EACH)

Answer rating: 100% (QA)

a To estimate the unemployment rate in Mali and Ghana at baseline we need to examine the coefficient for the FreeSHS variable in the regression output ... View the full answer