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Dynamics in human capital production

This extra credit purposefully goes back to sections of the class that we have already covered so  that you can revisit these topics as part of knowledge maintenance. When learning about human  capital and education, in class, we discussed the idea of dynamics in the production function and interactions between various policies. This paperprovides a nice overview of the early human capital development studies and discusses the “interaction studies” in Section 5 (“Sometimes lightning strikes twice”). Please dive deeper into these papers so that you understand the concept better. Your goal for this extra credit is three-fold:

(1) Describe briefly the concept of dynamics in human capital production and why policy interactions could be key from economic perspective (0.5 point)

(2) Come up with one interaction between two existing policies. Describe the policies and explain why they are important. (0.5 point)

(3) Describe theoretical (expected) implications of the interaction from point #2 and discuss how you would estimate this causally. What assumptions are necessary for causality?

What would be the estimating equation? What data can be used to do this? Please be specific about potential modeling pitfalls and issues related to data availability. Your analysis needs to be based on existing data and existing policies. You cannot makeup your own policies or data. (2 points)

Deliverables: 3-part report similar to the 5-pager you were preparing for your individual project. Maximum length 2 pages. Sections (1) and (2) should not exceed 0.5 page each (i.e., one page) while the reminder of the report should be devoted to section (3).

Formatting: Times New Roman, 12, 1.5 spacing, standard 1 inch margins; citations as well as figures and tables do not count against the page limit. Please upload your file in pdf via Canvas titled lastname_firstname_ec2.pdf

Total available extra credit: 3 points.

Deadline: November 29th 2023 at midnight EST.