LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
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Question
Chapter 6, Problem 6RQ
To determine
The ability bias in the estimation of the
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You have the following equation relating job risk R to wages W: W = .01*R + XB, where XB indicates control for the following confounders: education, job experience, and income. Assume W= annual wages=50,000
A. If the change in R = a 1 in 10,000 higher chance of death in a year, how much more would an individual need to be paid to be willing to assume this risk?
B. What is the implied statistical value of a year of life based on this model?
C. What do you think would happen to the estimated relationship between R and W if none of the three confounders were included in this model? Explain.
“It is hypothesized that there is a difference in job satis¬faction between those who receive regular feedback on their job performance and those who receive irregular feedback.” is an example of which type of hypothesis?
a.
Not a hypothesis
b.
Null hypothesis
c.
Directional hypothesis
d.
Non-directional hypothesis
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 heterogeneity
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