LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
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Question
Chapter 9, Problem 5P
(a)
To determine
Determine the male-female differential in the labor market.
(b)
To determine
Determine how much of the wage differential could be discrimination in terms of Oaxaca-Blinder decomposition.
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The following data give the hourly wage rates (Rands) for a sample of 20 workers selected from a largecompany.12.50 9.45 13.85 7.25 8.70 14.60 11.75 14.50 10.80 12.457.50 15.90 9.75 11.50 13.30 6.25 15.50 12.80 5.35 9.50
(vi) Draw an OGIVE curve corresponding to the data and use it to estimate the median.
Consider two states that adopt different laws concerning labor unions.
The following graph shows the labor market in a state in the North. Initially, the market-clearing wage there is $10.00 per hour.
Suppose that the legislature in this northern state passes laws that make it easy for workers to join a union. Through collective bargaining, the union
negotiates a wage of $12.50 per hour.
Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.
Graph Input Tool
Market for Labor
20.0
I Wage
(Dollars per hour)
17.5
Supply
2.50
Labor Demanded
(Thousands of
workers)
Labor Supplied
(Thousands of
workers)
15.0
875
125
12.5
10.0
7.5
Demand
5.0
2.5
125
250
375
500
625
750
875
1000
LABOR (Thousands of workers)
Enter $12.50 into the box labeled Wage on the previous graph.
Hint: Be sure to pay attention to the units used on the graph.
At the union wage,
375,000 union workers will be employed.
The following graph shows the…
Consider a simple demand-and-supply model of a competitive labour market in a small town. The demand and
supply curves for labour are given by
Demand: w=24-3LD
S
Supply: w=6+3L
where w is the wage ($ per hour) and L is the number of hours of employment (measured in thousands of hours
per month).
a. Use the line drawing tool to plot the demand and supply curves in the graph at the right. Use points with
labour hours value of 0 and 5 to draw the lines. Label the lines properly.
Carefully follow the instructions above, and only draw the required objects.
Wage ($ per hour)
24-
22-
20-
18-
16-
14-
12-
10-
8-
6-
4-
2-
0-
0
Labour Market
2
3
4
Labour (thousands of hours per month)
5
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