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Suppose that average worker productivity at manufacturing firms (avgprod) depends on two factors, average hours of training (avgtrain) and average worker ability (avgabil):
avgprod = (0 + (1 avgtrain + (2 avgabil + u.
Assume that this equation satisfies the Gauss-Markov assumptions. If grants have been given to firms whose workers have less than average ability, so that avgtrain and avgabil of avgprod on avgtrain? |
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