LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
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Chapter 7, Problem 3RQ
To determine
The role of experimental method to evaluate the impact of training programs.
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Discuss how empirical studies estimate the rate of return to schooling and the methods used to avoid the problem of ability bias.
Discuss the view that the specificity of the on-the-job training does not matter in the choice of who bears the cost of on-the-job training.
The use of group averages to judge individual productivity levels is called Statistical Discrimination. Therefore; this type of discrimination differs from ordinary discrimination because it is based on incomplete information rather than on the utility-maximizing choices of people with accurate information?
True
False
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- Suppose two households earn $50,000 and $84,000 respectively. What is the expected percent difference in wages between the children, grandchildren, and great-grandchildren of the two households if the intergenerational correlation of earnings is 0.4? Show your work. Children: __________________ Grandchildren: __________________ Great-grandchildren: __________________arrow_forwardHow does path dependency provide an explanation for differentiation in earnings between men & women?arrow_forwardIn the competitive labor market model of this chapter, the "value of the marginal product minus the wage" (MPL xP - W) for a given unit of labor (e.g., worker) gives Group of answer choices a) the change in output from the unit of labor being considered. b) the change in profit from the unit of labor being considered. c) the change in revenue from the unit of labor being considered. d) the change in price from the unit of labor being considered. e) the change in cost from the unit of labor being considered.arrow_forward
- The breaking up of jobs into smaller and smaller units, with each worker performing fewer tasks but repeating them thousands of times per day, has contributed to health problems of workers true falsearrow_forwardThe textbook discusses some strategies for correcting for ability bias when trying to estimate the rate of return to education. a) Explain ability bias. b) Discuss the method of using data on identical twins to control for ability bias. c) Discuss the method of using certain birth dates to control for ability bias. The Textbook: Labor Economics, 8th Edition, by George Borjas, published by McGraw-Hill.arrow_forwardSuppose two households earn $40,000 and $56,000 respectively. What is the expected percent difference in wages between the children, grandchildren, and great-grandchildren of the two households if the intergenerational correlation of earnings is 0.2, 0.4, or 0.6?arrow_forward
- Suppose Fred's wage-schooling relationship is given by Years of Schooling Earnings 9 $28,000 10 $31,150 11 $33,700 12 $35,900 13 $37,400 14 $38,500 Derive the marginal rate of return schedule. When will Fred quit school if his discount rate is 5 percent? What if the discount rate is 10 percent?arrow_forwardDescribe how workers and firms “marry” each other in the labor market when there are many types of jobs offering various levels of risk to their workers. What does the slope of the hedonic wage function measure?arrow_forwardThe labor demand and supply data in the following table relate to a single occupation. Use them to answer the questions that follow. Base your answers on the taste-for-discrimination model. a. Plot the labor demand and supply curves for Hispanic workers in this occupation.b. What are the equilibrium Hispanic wage rate and quantity of Hispanic employment? c. Suppose the white wage rate in this occupation is $16. What is the Hispanic-to-white wage ratio?d. Suppose a particular employer has a discrimination coefficient d of $5 per hour. Will that employer hire Hispanic or white workers at the Hispanic-white wage ratio indicated in part c? Explain.e. Suppose employers as a group become less prejudiced against Hispanics and demand 14 more units of Hispanic labor at each Hispanic wage rate in the table. What are the new equilibrium Hispanic wage rate and level of Hispanic employment? Does the Hispanic-white wage ratio rise or fall? Explain.f. Suppose Hispanics as a group increase their labor…arrow_forward
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