LABOR ECONOMICS LOOSELEAF 8/E
8th Edition
ISBN: 9781264010516
Author: BORJAS
Publisher: MCG
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Question
Chapter 8, Problem 5P
(a)
To determine
Determine how the welfare programs influence the incentive to migrate to Country U in terms of Roy model.
(b)
To determine
Determine the impact of the welfare program on the selection of the immigrant flow.
(c)
To determine
Identify the worker who is most likely to be attracted by the welfare program.
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Suppose the United States enacts legislation granting all workers, including newly arrived immigrants, a minimum income floor of y dollars. (Assume there is positive selection of migrants from the home country to the United States.)a. Generalize the Roy model to show how this type of welfare program influences the incentive to migrate to the United States. Ignore any issues regarding how the welfare program is funded.b. Does this welfare program change the selection of the immigrant flow? In particular, are immigrants more likely to be negatively selected than in the absence of a welfare program?c. Which types of workers, the highly skilled or the less skilled, are most likely to be attracted by the welfare program?
Would a massive, nationwide cessation of all welfare programs force the indolent to work?
What is the main goal of redistribution policies in welfare economics? A. To increase government revenue B. To reduce
income inequality C. To maximize consumer surplus D. To minimize deadweight loss
Chapter 8 Solutions
LABOR ECONOMICS LOOSELEAF 8/E
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Similar questions
- Suppose the immigrant flow from Lowland to Highland is positively selected. In order to mitigate the “brain drain” Lowland experiences as a result of this migration, public officials of Lowland successfully convince all Lowlanders who migrate to Highland to remit 10 percent of their wages to family members.a. What effect will this policy have on the immigrant flow?b. Provide a graph that details the extent to which this policy will limit the brain drain.arrow_forwardLabor economics What is positive/negative selection of migrants? What determines whether migrants are positive selected?arrow_forwardWhat is the poverty trap? Group of answer choices A)The situation where government assistance can result in a low or zero net gain for working. B)The situation where a person becomes unemployed and cannot find another job. C)The situation where a person becomes disabled and cannot work. D)The poverty trap occurs when a person is poor, and structural discrimination prevents that person from escaping poverty.arrow_forward
- Discuss how the wage-schooling locus is determined in the labor market, and why it is upward sloping and concave.arrow_forwardIn California, a welfare recipient is eligible for welfare benefits of $645. Benefits are reduced by 50 cents for every dollar of earnings. Consider Elizabeth, a resident of California, who can earn $10 per hour. a. If she works 10 hours, how much are her earnings, how much is her welfare benefit, and how much is her income? b. After Elizabeth works a certain number of hours, she does not receive any benefit at all. What is that number of hours? c. Use your answer to parts a and b to plot her budget constraint. d. Sketch a set of indifference curves consistent with Elizabeth's participating in the labor marketarrow_forwardSome types of cash grants are provided only to beneficiaries who are out of the labour force. Discuss the effect of these types of grants on work incentives, and illustrate graphically its effect on low salaried workers, with respect to decision to stay or leave the labour forcearrow_forward
- The classic model of the labor market clearly shows that an increase in the supply of labor (new workers) reduces wages. Explain, in your own words, why this is an incomplete story and we should consider changes in the demand for labor as well when we try to model the effects of immigration.arrow_forwardWhy can welfare programs, if not managed correctly, create work disincentives?arrow_forwardSuppose the government introduced a child benefit equal to $7000 per year. For every dollar earned by the family, the benefit amount is reduced by 7 cents. At what level of earnings will the family no longer receive a child benefit?arrow_forward
- Suppose a government program guarantees $ 2,000 a month in income, even for those who do not work at all. However, if the recipient earns income by working, the benefit is reduced by 50 cents for each $1 earned. Which of the following statements is true? This program will redefine the proverty line. While the goal may be to reduce poverty, people rarely respond to incentives. This program will reduce the incentive to work significantly. The goal of this program is to increase the incentive to work, reducing the poverty trap.arrow_forwardSee the income and benefits information for a wage earner in an antipoverty program with a phased-out approach in the table below. How much more could one earn in total income if he chose to work 500 additional hours beyond whatever amount he currently works? Table 1: The Labor-Leisure Tradeoff with Assistance Reduced by 50 Cents for Every Dollar Earned Amount Worked Total Government Total (hours) Earnings Support Income $18,000 $20,000 $18,000 500 $4,000 $16,000 1,000 $8,000 $14,000 $22,000 1,500 $12,000 $12,000 $24,000 2,000 $16,000 $10,000 $26,000 2,500 $20,000 $8,000 $28,000 Select the correct answer below: O $0 O $2, 000 $4, 000 O $18, 000arrow_forwardIs poverty an unfortunate circumstance or a character defect?arrow_forward
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