Principles of Economics- Mankiw (5th) 411

Principles of Economics- Mankiw (5th) 411 - CHAPTER 19 E A...

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CHAPTER 19 EARNINGS AND DISCRIMINATION 423 CASE STUDY HUMAN CAPITAL, NATURAL ABILITY, AND COMPULSORY SCHOOL ATTENDANCE Does attending school increase wages because it increases productivity, or does it only appear to increase productivity because high-ability people are more likely to stay in school? This question is important both for judging the various theories of education and for evaluating alternative education policies. If economists could conduct controlled experiments like laboratory scien- tists, it would be easy to answer this question. We could choose some experi- mental subjects from the school-age population and then randomly divide them into various groups. For each group we could require a different amount of school attendance. By comparing the difference in the educational attainment and the difference in subsequent wages of the various groups, we could see whether education does in fact increase productivity. Because the groups would be chosen randomly, we could be sure that the difference in wages was not at-
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This note was uploaded on 07/30/2010 for the course ECON 120 taught by Professor Abijian during the Spring '10 term at Mesa CC.

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