LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
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Question
Chapter 7, Problem 15P
a)
To determine
The international correlation of earnings for improved educational outcomes for all populations.
b)
To determine
The effect of the elimination of legacy admits to colleges and universities.
c)
To determine
The effect of the implementation of a federal inheritance tax.
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Students have asked these similar questions
Q1) Explain why the intergenerational correlation of earnings would likely be higher
or lower than average for the following groups and factors in the United States:
(a) Improved educational outcomes for all populations (e.g., minority, low-income,
rural) as hoped for by No Child Left Behind.
(b) The elimination of legacy admits to Colleges and Universities.
(c) The implementation of a federal inheritance tax.
We explored a number of explanations that help us better understand the existence and persistence of the male-female earnings gap.
a) Describe any one explanation for the male-female earnings gap that centres on the role of employers.
b) Describe any one explanation for the male-female earnings gap that centres on the role of co-workers.
c) Describe any one explanation for the male-female earnings gap that centres on the existence of male-dominated jobs and female-dominated jobs.
d) Describe any one explanation for the male-female earnings gap that centres on unequal household responsibilities.
Suppose two households earn $50,000 and $84,000 respectively. What is the expected percent difference in wages between the children, grandchildren, and great-grandchildren of the two households if the intergenerational correlation of earnings is 0.4? Show your work.
Children: __________________
Grandchildren: __________________
Great-grandchildren: __________________
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- Consider an earnings function. In addition to the usual explanatory variables of experience and schooling, one can include variables for reflecting all of the following factors except: A) industry premiums. B) family background. C) occupational premiums. D) regional premiums. E) unobserved heterogeneityarrow_forwardSuppose 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_forwardThe crowding model of occupational discrimination suggests that occupational segregation results in Multiple Choice a lower domestic output than would otherwise be the case. higher levels of total employment than would otherwise be the case. higher interest rates in the private sector than would otherwise be the case. a higher rate of inflation than would otherwise be the case.arrow_forward
- Which 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_forwardThe 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.arrow_forwardHow does skill atrophy provide an explanation for differentiation in earnings?arrow_forward
- Productivity may not account for all of the wage disparities and growing income inequality in the United States. Discrimination, education, globalization, and legislation are all factors that can have an impact. The salary disparity between CEOs and average workers is also significant. Productivity is an important factor in labor-market wage disparities, but it is not the only one. Tax policies that favor the wealthy, as well as a decline in unionization, can both lead to rising income disparity. Changes in skilled labor demand, globalization, technology, and government policy can all contribute to the United States' expanding wealth gaps.arrow_forwardFor each of the scenarios in the following table, indicate the most likely reason for the difference in earnings. Differences in Human Capital Scenario Major league hockey goalies earn more than minor league hockey goalies. Two automotive technicians have the same amount of schooling and work experience, but earn different wages. The first works the day shift for an auto manufacturer factory for an annual wage of $54,000 per year, and the second works the night shift for the same company for an annual wage of $60,000 per year. Research done in the United States, based on U.S. Census data, finds that -during an adult's working life-high school graduates earn an average of $1.2 million, associate's degree holders earn about $1.6 million, and bachelor's degree holders earn about $2.1 million. Compensating Differential Differences in Ability Labor Unions O Oarrow_forwardSuppose that 15 states decrease the length of the standard work week from 40 to 35 hours. You are interested in the effects of this change on worker productivity. What effects might you expect to see? How would you conduct a difference-in-difference analysis to estimate the impact? What assumption must hold for the difference-in-difference analysis to be valid?arrow_forward
- What is the difference between the adjusted and unadjusted gender wage gap, and what are their relative values? The unadjusted wage gap does not account for differences in career, job title, or hours worked, and is smaller than the adjusted wage gap. The adjusted wage gap does not account for differences in career, job title, or hours worked, and is smaller than the unadjusted wage gap. The adjusted wage gap does not account for differences in career, job title, or hours worked, and is larger than the unadjusted wage gap. The unadjusted wage gap does not account for differences in career, job title, or hours worked, and is larger than the adjusted wage gap.arrow_forwardidentify two major trends in the changing demographics of the workforce.arrow_forward
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