Answered: Explain how the method of instrumental…

Explain how the method of instrumental variables can be used to estimate the compensating differential associated with employer-provided health benefits.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter19: Earnings And Discrimination

Section19.2: The Economics Of Discrimination

Problem 2QQ

See similar textbooks

Related questions

Q: How is the isomorphic concept applied in determining executive salaries?

A: Isomorphism refers to the likeness of one organization's operations or structure to those of…

Q: The human capital model of investment in an athlete's training incorporates both the costs and…

A: Since the question you have posted consists of multiple parts, we will answer the first two…

Q: Analyze the role of the market in addressing workforce shortages, including projections for the…

A: Monopsony: It is a market structure that is dominated by a single buyer who has a controlling…

Q: Tom and Jerry work for the Same company, but Tom earns evidence of wage discrimination? Explain-

A: Wage discrimination means paying someone less due to of their age,race, gender or religion.

Q: is there a gap between the mean earnings for male and female recent college graduates?

A: A gender pay gap is the mean difference between the wage of working men and women. Yes, there is a…

Q: 3) Suppose the economy of the country Brickenshire had 3 occupations: butcher, baker, and…

A: Labor force is the total population of a place that are either employed or unemployed but looking or…

Q: 23. Compensating wage differentials arise to compensate workers for the wage characteristics of…

A: 23. In the labor market, pay differentials are frequently compensating wage differentials. Due to…

Q: Brief explain about Gap hipothesis theory

A: Brief explain about Gap hypothesis theory

Q: Can regression be used to estimate the effect of gender on an individual’s earnings?

A: Regression analysis estimate the relationship between a dependent variable and one or more…

Q: What is a compensating wage differential? Discuss whether or not we observe such differentials in…

A: Labor market refers to the market in which labor is demanded and supplied and simultaneously decides…

Q: Derive the Oaxaca measure of discrimination. Does this statistic truly measure the impact of…

A: Oaxaca discrimination refers to the wage differential among men and women because of different…

Q: How will the following issues shape compensation professionals' work for years to come: Increased…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: Why a sizeable part of the female and male wage differential might be attributable to 'supply side'…

A: The gender pay gap, also known as the wage gap, is the average difference in pay between men and…

Q: Suppose the discrimination coefficient increases as the firm employs more black workers. In…

A: Given: The discrimination coefficient is d = 0.01 EB The competitive wages of wW for whites and wB(1…

Q: Assume there are only two jobs and that both jobs use the skill set possessed by both Preferred (P)…

A: When the two different jobs are available, people are attracted by higher paying job and shifting to…

Q: Evaluate three reasons for occupational mobility

A: Labor economics refers to the analysis of the contribution of the labor force in the process of…

Q: How do economists define teacher quality? Discuss the strengths and weaknesses of this definition.

A: Teaching is a cultural activity, and perceptions of teacher quality have evolved as American…

Q: 2. Give an overview of the studies examining gender discrimination.

A: Gender equality is important. Girls and boys have equality of opportunity, which helps all students…

Q: ecessarily examples of discrimination. Is an example of discrimination Is not necessarily an example…

A: LMD is defined as a situation where workers are treated differently in terms of recruitment, pay,…

Q: Explain how the market-compensating wage differential between safe jobs and risky jobs is…

A: Market-compensating wage differential can be easily determined using by supply labour analysis of…

Q: Use a demand-and-supply model to explain the impact of occupational segregation or “crowding” on the…

A: Occupational segregation is the distribution, based on demographic factors, most often gender, of…

Q: How does workforce demographic shifts affect compensation?

A: At the marketplace, workforce refers to the total number of people who serve their services to…

Q: What is statistical discrimination? Why do employers use group membership as an indicator of a…

A: Statistical discrimination arises due to differences in statistics factors. The employer will be…

Q: From an internal sourcing perspective, which HR initiatives and strategies are effective approaches…

A: The labor market is the place where the workers will sell their labor power and the producers will…

Q: Discuss how empirical studies estimate the rate of return to schooling and the methods used to avoid…

A: The empirical studies estimate the rate of return using the data on the earning and schooling of…

Q: One possible measure of gender discrimination is to look at the difference between the average male…

A: Gender discrimination at workplace is primarily explained by the wage gap between the men and women…

Q: Discuss the difference between general training and specific training. Who pays for and collects the…

A: The genera training is that type of training which contributes and make an addition to worker’s…

Q: Suppose male wages are determined by the earnings function WM = 25 + 0.40EM and female wages are…

A: Given that, WM = 25+0.40EM WF = 15 + 0.20EF Women experience =10 Men experience = 20

Q: Do you believe or think PPP(Public Private Partnership) could be a game changer in the post covid HR…

A: When a certain product is manufactured, cost is involved and process of business then follow ups.…

Q: How is the market-compensating wage differential between safe jobs and risky jobs determined? Which…

A: The labour market does not contain a single wage system. It encompasses the different types of jobs…

Q: Explain 'motherhood wage penalty'

A: Despite the growing importance of female employment around the world, there have been few attempts…

Q: Major conclusions that can be drawn from the Hedonic theory of compensating wage differentials.

A: In an economy, the labor market is analyzed differently from the goods market because equilibrium in…

Q: Due to there being discrepancies between the productivity and resource offerings (i.e., education,…

A: Marginal revenue product (MRP) is the marginal revenue (MR) created due to adding one extra unit of…

Q: The figure shows the age-earnings profiles for the native born and for immigrants. YSM = years since…

A: Immigrants spend more in human capital, which enhances locals' stock by amassing more human capital.…

Q: It is difficult to measure to what extentdiscrimination affects labor market outcomesbecausea. data…

A: In competitive labor markets, the employees are the suppliers of labor while firms are agents that…

Q: Identify the three most important pieces of labor relationslegislation enacted in the 20th century.

A: There are multiple pieces of labour relations which were enacted in the 20th century. The three most…

Q: Empirical studies show that the average woman earns $0.80 for every dollar earned by the average…

Q: The following statistic is reported by the U.S. Bureau of Labor Statistics: in 2014, women’s average…

A: Compensating differentials is defined as an additional amount of wage/income that must be offered to…

Q: illustrate graphically a decrease of one of the determinants of aggregrate supply.

A: The macroeconomic equilbrium in an economy is determined by the aggregate demand and aggregate…

Concept explainers

Price Discrimination

Price discrimination or differential pricing is based on the principle that the seller will charge the buyer a price based on the buyer’s ability and willingness to pay for the product rather than applying uniform pricing for all.

Question

Explain how the method of instrumental variables can be used to estimate the compensating differential associated with employer-provided health benefits.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

How is cross elasticity and income elasticity relevant to Indigo’s managerialdecision making?
Discuss the need for ethical frameworks in the employment sphere.
Discuss how upward-sloping age-earnings profiles can elicit more effort from workers.
Major conclusions that can be drawn from the Hedonic theory of compensating wage differentials.
From an internal sourcing perspective, which HR initiatives and strategies are effective approaches to filling key positions in a labor market with talent shortages?
How does skill atrophy provide an explanation for differentiation in earnings?
How does workforce demographic shifts affect compensation?
When testing for wage discrimination based on race, which of the following variables are control variables? A wage and race B experience and performance C experience and race D performance and race E wage and experience
The major problem with the occupational crowding and dual labor market theories of discrimination is that a) they suggest discrimination is profitable for the firms. b) they are based on the notion of noncompeting groups. c) they are not completely consistent with the empirical facts of labor market discrimination. d) they do not explain how the noncompeting groups were initially formed.
After controlling for age and education, it is found that the average woman earns $0.80 for every $1.00 earned by the average man. After controlling for occupation to control for compensating differentials (i.e., maybe men accept riskier or more stressful jobs than women, and therefore are paid more), the average woman earns $0.92 for every $1.00 earned by the average man. 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.
In the labour-discipline model (LDM), the employer sets the wage to minimise the cost of effort. Using the LDM, illustrate and explain how a change in conditions affect the employee’s best response function (BRF) in the following scenarios: In relation to the hospitality sector (e.g. restaurant industry) in the US: a sharp increase in the pool of unemployed people due to a hiring freeze, combined with a rise in unemployment benefits.
What is statistical discrimination? Why do employers use group membership as an indicator of a worker’s productivity? What is the impact of statistical discrimination on the wage of the affected workers? Must statistical discrimination reduce the average wage of blacks or women?