Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter ST8, Problem 2CQ
To determine
The impact of the increasing labor force participation rate of married women.
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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.
Why did the labor force participation rate of women increase so much in the past century?
Suppose male wages are determined by the earnings function WM = 25 + 0.40EM and female wages are determined by the earnings function WF = 15 + 0.20EF. If women have 10 years of experience and men have 20, what is the gender wage gap? How much can be attributed to human capital differences and how much is unexplained, and therefore attributed to discrimination? Show this scenario on a graph of both the male and female earnings functions
Chapter ST8 Solutions
Economics: Private and Public Choice (MindTap Course List)
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- 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_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_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_forward
- Alternative 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_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_forwardidentify two major trends in the changing demographics of the workforce.arrow_forward
- Wage differences can be explained by all of the following except: A) compensating differentials. B) differences in marginal revenue products. C) economic discrimination. D) comparable worth.arrow_forwardThe entry of women into the workforce resulted in: Increase in quantity of labor Increase in labor productivity Increase in quality of labor Technological advancesarrow_forwardWhen would you see the greatest gain if there is a compensating differential built into your salary? The differential is for a negative risk that you care about more than most people do. The differential is for a large negative risk that you don't care about as much as most people do. The differential is for a positive job aspect that you don't care about as much as most people do. The differential is for a slightly positive job aspect that you care about more than most people do.arrow_forward
- What relationship might be illustrated by a hedonic wage function: a) the relationship between the wage and a worker's race b) the relationship between the wage and the probability of injury faced by the worker c) the relationship between the wage and a worker's gender d) the relationship between the wage and a worker's skill level e) the relationship between the wage and a worker's agearrow_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? Check all that apply. a) Efficiency wages b)The superstar phenomenon c) Discrimination d) Human capital e) Natural abilityarrow_forwardHow does age impact on job mobility? Explain in shortarrow_forward
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