Consider the following two periods panel data model: Wageit = Bo + do D2 + BEducit + B Expit +B3Female; + ai + uit, t = {1,2}, where D2 is a dummy variable which equals to one in period 2 and zero in period 1. (a) Can we estimate the above model by OLS? Explain why. (b) Explain whether the OLS regression controls for individual-specific unobserved heterogeneity (i.e., a fixed effect a;)? (c) Write down the first differenced model. State which coefficients can be esti- mated by OLS? (d) Explain whether the first differenced model controls for individual-specific un- observed heterogeneity (i.e., a fixed effect a;)? (e) Write down the demeaned model. State which coefficients can be estimated by OLS? (f) Show that the models in (c) and (e) are actually equivalent.