ECON 3210 Lecture Notes - United States Consumer Price Index, Stata, Thought Experiment
Document Summary
Check the file practiceproblem_commands. do file for all computer related exercises. Some observed characteristics are education, job market experience and experience in a particular job. Regarding unobserved characteristics, perhaps firms choose to offer training to more or less able workers. Aability might be difficult to quantify although a manager has some idea about the relative abilities of different employees: the amount of capital and technology available to workers would affect output. So, two firms with exactly the same kinds of employees would generally have different outputs if they use different amounts of capital or technology: no, unless the amount of training is randomly assigned. The many factors listed in (b) and (c) can contribute to finding a positive correlation between output and training even if job training does not improve worker productivity. For example, if firms decide to provide trainings to workers with higher ability, we would find the correlation to be positive even though the training doesn"t help at all.
