Drawing DAGs for Simple DGPs (Research Design)

For each of the following stories add a comment-only section in your .do file.

1. You want the causal effect of training on wages. Higher-ability workers are more likely to enroll in training, and ability also raises wages. So trained workers earn more partly because of training and partly because they have higher ability. What is the causal effect of training on wages?

1. Draw DAGs using <- ->.
2. Identify confounders (if any), colliders (if any), and mediators (if any).
3. State which variable(s) you would condition on to identify the a causal effect.

2. You want the causal effect of training on wages. Training increases productivity, and productivity increases wages. So training can raise wages directly and also indirectly by raising productivity. What is the causal effect of training on wages?

1. Draw DAGs using <- ->.
2. Identify confounders (if any), colliders (if any), and mediators (if any).
3. State which variable(s) you would condition on to identify the a causal effect.

3. You want the causal effect of training on wages. You’ve collected data on people who are employed. Both training and wages affect whether someone is employed. What is the causal effect of training on wages?

1. Draw DAGs using <- ->.
2. Identify confounders (if any), colliders (if any), and mediators (if any).
3. State which variable(s) you would condition on to identify the a causal effect.

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