00:01
Part 1.
00:03
This is the regression result of log -a -wage on siblings.
00:10
This is a reduced form simple regression equation.
00:15
It shows that controlling for no other factors on more sibling in the family is associated with monthly salary.
00:25
That is about 2 .8 % lower.
00:30
Let me write that down.
00:59
The t statistic on siblings is about minus 4 .7, meaning this variable is highly significant.
01:19
Siblings can be correlated with many things that should have an effect on wage, including years of education.
02:07
Part 2 it's possible that older children are given priority for higher education.
02:18
Families may hit budget constraint and may not be able to afford as much education for children born later.
02:27
This is the regression result of education on birth order.
02:39
This equation predicts every one unit increase in birth order reduces predicted education by about 0 .28 years.
02:55
3.
02:56
When we use birth order as an instrument for education in the simple wage equation, this is what we get...