Contemporary Labor Economics
11th Edition
ISBN: 9781259290602
Author: Campbell R. McConnell, Stanley L. Brue, David Macpherson
Publisher: McGraw-Hill Education
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Question
Chapter 4, Problem 13QS
a)
To determine
Indicate the implication of screening hypothesis to estimate the
b)
To determine
The part of collage is consumption and not investment.
c)
To determine
The fact that those who go to college are more able financially than those who do not.
d)
To determine
The jobs for college graduates generally have better benefits.
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Given your experience and what you have learned from the chapter, consider what factors are likely to lead to a high income.
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Answer Bank
Many people will experience poverty at some point in their lifetimes.
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Suppose you currently earn $40,000 a year. You are considering a job that will increase your lifetime earnings by $400,000 but that requires an MBA. The job will mean also attending business school full time for two years at an annual cost of $50,000. You already have a bachelor’s degree, for which you spent $150,000 in tuition and books.
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Earning a college degree has some well-known and well-documented advantageous impacts on an individual. That is the motivation for people to delay their entry into the workforce for four or five years while they earn a baccalaureate degree. However, studies have shown significant positive impacts on the community, the state, and society caused by higher education. For example, states with more college-educated people also display better health conditions, higher earnings, lower crime, more innovation, and a general increased standard of living. In the language of our current module, higher education is a positive externality. The person deciding to attend college is doing it for the benefits she will receive from this new knowledge and experience. However, it is also true that there will be positive spillover effects on her community and state.
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