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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 = B0 +B1 * educ + 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.
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