LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 15P
To determine
Explain the give statement.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Which of the following regarding family-friendly workplace practice is correct?
Multiple Choice
None of the answer choices are correct.
Empirical research finds little evidence to support the use of the theory of
compensating wage differentials to explain family-friendly workplace practice.
Conditions such as the availability of parental leave, flexible working hours, job
sharing, and taking time off work and making it up later are all part of the family-
friendly workplace programs advocated by the government.
One cannot use the theory of compensating wage differentials to explain family-
friendly workplace practice, since people are not willing to accept lower wages
in return to family-friendly work environment.
One cannot use the theory of compensating wage differentials to explain family-
friendly workplace practice since it is not viewed as a job characteristic.
two theories of education: human capital and signaling. Economists have estimated fairly large "sheepskin" effects, where wages increase significantly when someone earns a degree. Do you think these sheepskin effects are consistent with the human capital theory of education or signaling? Carefully explain.
Do you think these theories could both hold some merit in the real world? Carefully explain.
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.
Knowledge Booster
Similar questions
- Some economists maintain that the returns to additional years of education is actually quite small but that there is a substantial “sheepskin” effect whereby one receives a higher salary with the successful completion of degrees or the earning of diplomas (i.e., sheepskins).Explain how the sheepskin effect is analogous to a signaling model.arrow_forwardHow does path dependency provide an explanation for differentiation in earnings between men & women?arrow_forwardSharon is the manager of a factory. Workers at the factory are assigned to one of two tasks, one of which requires skilled labor and one of which requires unskilled labor. Because skilled workers earn a higher wage than unskilled workers, everyone who applies for a job says they're skilled. Sharon's challenge is to figure out who is actually a skilled worker and who is an unskilled worker. Suppose that Sharon would like to use the economic concept of screening to separate out worker types. Which of the following scenarios illustrates this concept? Skilled workers pay to take a certification course to demonstrate their ability. Sharon voluntarily pays all workers a higher wage in hopes of attracting and retaining more productive workers. Sharon implements a test to determine whether applicants are skilled or not. Suppose, instead, the manager considers paying efficiency wages to increase the factory's profitability. True or False: Efficiency wages are set equal to the average industry…arrow_forward
- Explain why child labour could actually be pareto-optimal.arrow_forwardImagine that the wage-schooling locus is given by w(s)=s^(1/3). What will be the optimal level of education for an individual to take if next period’s earnings in any given time are worth 95% of current earnings for that individual? Answer is s=20/57 I need step by step calculationsarrow_forwardEmpirical studies show that the average woman earns $0.80 for every dollar earned by the average man, after controlling for age and education. Further, the average woman earns $0.92 for every dollar earned by the average man after controlling for occupation . The conclusion is made that occupational choice reduces the wage gap 12 cents and discrimination is left to explain the remaining 8 cents. a) Explain why discrimination may explain more than 8 cents of the 20 cent differential (and occupational choice may explain less than 12 cents of the differential). b) Explain why discrimination may explain less than 8 cents of the 20 cent differential.arrow_forward
- Assume 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_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_forwardJoanne states: "The best way to increase the wages of workers is to increase workerproductivity." Is Joanne correct? Why or why not?arrow_forward
- There are 81 white seniors graduating from high school and 27 black seniors. a. All of the students with high school degrees apply to UW – Milwaukee. The admissions office looks at their records, and finds that 30% of black students drop out after the first year, compared to 15% of white students. If they have 85 openings, how many of each type of student should the admissions office hire to maximize their graduation rate? b. Suppose there is no difference in graduation rates between black and white students. However, the admissions office wants students who will get good grades. They don’t have access to grade histories of different students, but they can see that all 26 of the 27 black applicants went to high school in Milwaukee, whereas 70 of the 81 white applicants went to schools in the suburbs. The schools in the suburbs have very good academic ratings, whereas the schools in Milwaukee do not. If they have 85 openings, how many of each type of student should the admissions…arrow_forwardThere are 50 workers in the economy in which all workers must choose to work a safe or a risky job. When it comes to accepting a risky job, Worker 1’s reservation price is $5; worker 2’s reservation price is $6, worker 3's reservation wage is $7, and so on. Assume there are exactly 12 risky jobs. (a) What is the equilibrium wage differential between safe and risky jobs? Which workers will be employed at the risky firm? (b) Suppose now that an advertising campaign, paid for by the employers who offer risky jobs, stresses the excitement associated with “the thrill of injury,” and this campaign changes the attitudes of the work force toward being employed in a risky job. Worker 1 now has a reservation price of $1, worker 2’s reservation price is $2, and so on. There are still only 12 risky jobs. What is the new equilibrium wage differential? c) What is the maximum the firm should be willing to pay for its ad campaign?arrow_forwardWhat is two factors that may influence the shape of individuals’ indifference curves (flat or steep) which reflect their preferences for work or leisure? What is the difference between income effect and substitution effect under the basic work-leisure decision model?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc