Effect of education on earnings

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As a natural experiment to estimate the effect of education on receivings, a researcher compares the schooling and educational attainment of two groups of people. The first consists of those that lived in a state that devoted a high percentage of its budget to post secondary education. The second consists of those that lived in a state that devoted little money to education. The first is the treatment group and the second is the control group.

(a) Assuming the researcher has information on the schooling, earnings, and state funding for higher education for a sample of people, how might this natural experiment be conducted?

(b) Evaluate the strengths and weaknesses of this experiment.

Reference no: EM1376368

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