LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
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Chapter 7, Problem 11RQ
To determine
The implications of regression toward the mean for the changing shape of the wage distribution across generations.
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Can regression be used to estimate the effect of gender on an individual’s earnings?
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The following statistic is reported by the U.S. Bureau of Labor Statistics: in 2014, women’s average weekly earnings is 83% of men’s average weekly earnings. This statistic is referred to, in the media, as the “gender wage gap”. Possible reasons wages vary among workers, and thus the average weekly earnings for women is different than that of men, include which of the following?
a.human capital
b.compensating wage differentials
c.job search uncertainty
d.All of the above.
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- Referring to the information provided in the table, what is the adult labor-force participation rate in Meditor? Labor Data for Adults (ages 16 and older) in Meditorarrow_forwardExplain how the decision to participate in the labour force is made. Include an indifference curve analysis diagram.arrow_forwardAlternative explanations of wage disparities Suppose that a labour economist finds that one of her research subjects has earned significantly higher wages throughout his lifetime than would be predicted by standard measured variables. The economist also noted that each of the subject's positions was found through connections at his family's exclusive country club. Which one of the following most likely explains this person's unusually high earnings? a) Effort b) Compensating differentials c) Chance d) Efficiency wages Suppose that Frances receives higher pay at her workplace than her colleagues do, even though they perform essentially the same type of work. If Frances's productivity is about 25% higher than that of each of her colleagues, which of the following wage concepts can explain this wage disparity? Check all that apply. a) Efficiency wages b)The superstar phenomenon c) Discrimination d) Human capital e)…arrow_forward
- Suppose that education is the only factor that affects productivity and that an additional year of education raises wages by 2%. Suppose in 2011 gender wage gap was 13%, and the average man had 15 years of education while the average women had 14 years of schooling. a) Using the wage gap decomposition technique, calculate how much of the 13% wage differential is due to discrimination? b) Now suppose in 2021 the gender wage gap is 10%, but the average woman’s education level is increased to 17 year and the average man’s education increases to16 years. (Assume that the return to education stays same at 2%), Was there a decrease or an increase in wage discrimination in the decade? Why?arrow_forwardAdjustments in employment can be small in size with a relatively fast adjustment, or the adjustments in employment can be large with a relatively slow adjustment in the cobweb model. Which result is associated with an inelastic labor supply?arrow_forwardNeed help ASAP, will give thumbs up: Consider an empirical wage equation of the form: log(W) = a + b(EDUC) + c(EXP) + d(EXPSQ) + u where the components are defined as: W = hourly wage rate log() is natural logarithmic function EDUC = completed years of school EXP = work experience EXPSQ = years of work experience squared (i.e. EXP times EXP) u = unobservable determinants of the hourly wage rate With data on the relevant variables for a sample of workers, the parameters a, b, c, and d can be estimated. QUESTION: What does human capital theory predict about the parameters of this wage equation? ANSWER CHOICES: b>0, c>0, d>0 b>0, c>0, d<0 b>0, c<0, d>0 b<0, c>0, d<0 b<0, c<0, d>0 Answerarrow_forward
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