1. What is the preferred criterion for the baseline regression estimates?
According to the log—likelihood criterion, defining skilled labor as those persons who have completed or attained college is the preferred criterion in Table 1 for the baseline regression estimates based on the log—differenced version (fixed effects removed) of specification (1).
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2. What is the simplest way to test the extent of capital skill complementarity?
In order to assess the extent of capital skill complementarity, the authors must work with a functional form that is general enough to accommodate different elasticities of substitution.
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3. What are the key characteristics of the nested CES production specifications?
Large sample sizes are particularly crucial to their work, as the results from estimating (the curvature of) the highly nonlinear nested CES production specifications requires a sufficiently large number of observations.
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4. What is the preferred definition of skilled workers?
According to the log-likelihood values, the definition of skilled workers as those who completed secondary education is preferred in the two—level CES specification, and the definition of skilled workers as those who attained some college is preferred for the CES—nested—in—CD specification.
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