What does it mean for two variables to have a causal relationship? Or, put differently, what is the difference between claiming that two variables are correlated versus the claim that one variable causes another? 2. On average, individuals with more education earn more.
(a) Provide one reason why we might claim that "education increases earnings", that is, that education has a causal effect on earnings.
(b) Provide one reason why we might not be able to claim that "education increases earnings," despite the strong positive correlation between the two variables.