Question: 2. Use data from wage.dta to answer the following questions: 1. Estimate the following model by OLS and report robust standard errors: log(wage) = Bo

2. Use data from wage.dta to answer the following questions: 1. Estimate the following model by OLS and report robust standard errors: log(wage) = Bo + Bleduc + Byexper + Byexper + BAmarried + u. (3) Interpret the coefficient on years of education. Why might this be a biased estimate of the effect of education on earnings? 2. The variable brthord is birth order (brthord is one for a first-born child, two for a second-born child, and so on). Explain why educ and brthord might be negatively correlated. Regress educ on brthord to determine whether there is a statistically significant negative correlation. 3. Use brthord as an IV for educ in equation (3). Report the coefficient and robust standard error on years of education. Interpret the coefficient on years of education. Compare the results to your earlier findings in (1) without using 2SLS estimation. For this exercise, the TAs will provide support on coding in Stata (free on Apporto - see the link to VCL on Canvas), but you can use any software you are comfortable with. Please submit your computer codes and a log file that stores all your estimation results. Please submit answers for questions using comments in your codes

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