a) Why and how might education have externality effects?
b) In our discussion of education and wages, we assumed that education raises a worker's wage by increasing the amount of output he or she can produce. Suppose that we instead believe that more-educated workers earn higher wages for reasons that have nothing to do with their productivity. For example, suppose that educated and uneducated workers both produce the same amount of output, but that educated workers earn more because they can steal part of what the uneducated produce. If this were true, how would it affect the analysis of education differences among countries?