8 pages
Mr.Q
20141026.docx1. What are human capital spillovers? What type of evidence has been used to demonstrate the existence of these spillovers? What are the consequences of these spillovers for urban economic development?
2. What is the difference between signaling and human capital theories concerning the return to education? What types of empirical evidence would help us distinguish between these competing theories?
3. A researcher runs the following regression on a cross section of adults using Census data.
ln w = b0 + b1 X + b2 ED + e
where w are annual earnings, ED is years of schooling, and X is a vector of controls (urban/rural residence, age, gender, race, married). His point estimate of b2 is .11 and it is statistically significant.
a. What is the interpretation of his estimate of b2?
b. In what ways might b2 be a biased estimate of the true return to schooling?
c. In what ways have researchers attempted to deal with the bias in b)?
4. What is the difference between the social and private return to schooling? In what ways might the private return to schooling higher than the social return? In what ways might the social return be higher than the private return? Give examples.
5. Imagine you were the economic development director for Columbia, Missouri. Your boss, the city manager, saw an interview with Edward Glaeser on TV. He asks you to read Triumph of the City and distill the key lessons for Columbia (in 600 words or less, he doesn’t like to read). What, if any, lessons might be drawn from the book for the Columbia mayor?
