Let kids denote the number of children ever born to a woman, and let educ denote years of education
for the woman. A simple model relating fertility to years of education is
kids 5 b0 1 b1educ 1 u,
where u is the unobserved error.
(i)
What kinds of factors are contained in u? Are these likely to be correlated with level of education?
(ii)
Will a simple regression analysis uncover the ceteris paribus effect of education on fertility?
Explain.