LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
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Question
Chapter 7, Problem 12P
a)
To determine
The Gini coefficient for the country.
b)
To determine
The 90-10 wage gap for any such ‘p’.
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Students have asked these similar questions
Suppose that, on average, men earn $17 an hour and have an average of 15
years of schooling. Women earn $15 an hour and have an average of 14
years of schooling. If the estimated return to schooling for men is 0.30
(implying that each additional year of schooling translates into an additional
30 cents per hour) and the returns for schooling for women is 0.2, then the
gender gap in schooling explains:
10% of the wage gap between men and women.
20% of the wage gap between men and women.
30% of the wage gap between men and women.
15% of the wage gap between men and women.
Question 5 ā Wage Structure
Suppose the 50 % of a countryās population with the lowest income receive 30 % of the nationās income, that the 50% with the highest income receive 70% of the nationās income.
a) What is the Gini coefficient for the country?
b) What is the limitation associated with Gini coefficient measure?
Suppose the discrimination coefficient increases as the firm employs more black workers. In particular, suppose the discrimination coefficient is d = 0.01 EB where EB is the number of blacks hired by the firm so that each employer facing competitive wages of wW for whites and wB for blacks acts as if she faces competitive wages of wW for whites and wB(1 + d) for blacks. As usual, assume the labor market is competitive so that the firm faces wages of wB and wW. Lastly, assume that the firm must employ 200 workers. Define the wage ratio to be wW / wB and do the following:a. Solve for the number of blacks hired as a function of the wage ratio. Graph the number of blacks hired against the wage ratio.b. Solve for the number of whites hired as a function of the wage ratio. Graph the number of whites hired ( x-axis) against the wage ratio ( y-axis).
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- The last three decades in the United States have been characterized by a very wide gap between the wages of those with more education and those with less. Suppose that workers eventually adjust to this gap by investing more in education, with the result that the wages of less skilled workers rise faster than those of the more-skilled (so that the wage gap between the two falls). How would a decline in the wage gap between the skilled and the unskilled affect immigration to the United States?arrow_forwardYou have two choices in jobs. Job A means you earn $70,000 a year, in an area where the average income is $80,000. Job B means you earn $60,000 a year in an area where the average income is $50,000. Assume all other factors such as housing quality, schooling, etc are the same. A "rational profit maximizer" would: Have an indeterminate choice. Be indifferent between the two wages. Always choose the lower wage. Always choose the higher wage.arrow_forwardAssume we are investigating gender differences in labor market outcomes and we are analyzing employee discrimination. When discussing employee discrimination, the typical assumption is that two groups of workers are perfect substitutes. Some research, however, suggests that worker productivity rises when the diversity of the workforce in a firm increases. This implies that the marginal productivity of male workers increases as more female workers are hired. If employee discrimination occurs against women, under what conditions will a gender-segregated workforce exist? Will a wage gap between men and women exist? Explain your answer.arrow_forward
- The labor demand and supply data in the following table relate to a single occupation. Use them to answer the questions that follow. Base your answers on the taste-for-discrimination model. a. Plot the labor demand and supply curves for Hispanic workers in this occupation.b. What are the equilibrium Hispanic wage rate and quantity of Hispanic employment? c. Suppose the white wage rate in this occupation is $16. What is the Hispanic-to-white wage ratio?d. Suppose a particular employer has a discrimination coefficient d of $5 per hour. Will that employer hire Hispanic or white workers at the Hispanic-white wage ratio indicated in part c? Explain.e. Suppose employers as a group become less prejudiced against Hispanics and demand 14 more units of Hispanic labor at each Hispanic wage rate in the table. What are the new equilibrium Hispanic wage rate and level of Hispanic employment? Does the Hispanic-white wage ratio rise or fall? Explain.f. Suppose Hispanics as a group increase their laborā¦arrow_forwardWhich of the following is an example of human capital discrimination? OA University is found guilty of discriminating against minorities in their admissions policy. A federal agency is found guilty of granting contracts only to firms owned and operated by white people. Women are crowded into nursing and teaching. Two employees, a man and a woman, have the same qualifications and experience, but the man is paid a higher wage. An employer refuses to hire minority people. A supply-side policy to reduce illegal drug usage would include A) Treatment programs for drug addiction. B) Clean needle exchange programs. O C Crop eradication.. O D) Education about the harm of illegal drugs.arrow_forwardSuppose 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?Ā Check all that apply. a) Efficiency wages Ā b)The superstar phenomenon Ā c) Discrimination Ā d) Human capital Ā e) Natural abilityarrow_forward
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