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31 Oct 2020

4. The gains in education and experience have _____________ the female/male wage gap over time.

a. increased

b. reduced

c. equalized

d. enhanced

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Microeconomics
Skill
Decoding Employment Discrimination
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Raushan Raj
Raushan RajLv8
31 Oct 2020

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Related questions

Suppose the following wage regression is run where the results are presented in a table below:

Wage = b0 + b1*Male + b2*Age + b3*Grade + b4*Married + b5*Experience

where the variables are as defined in class. Refer to the empirical results when answering the questions.

Coefficients

Standard Error

t Stat

Intercept

-7.856

0.404

-19.444

Male

1.845

0.093

19.793

Age

0.123

0.015

7.902

Grade

0.677

0.021

31.920

Married

0.713

0.099

7.133

Experience

0.0096

0.0003

26.003

a) According to these regression results, do married individuals earn more than those non-married?

b) How much less would a female expect to earn on average than a male (when controlling for age, grade, marital status, and experience)?

c) Which variables are statistically significant at the 95 percent confidence level?

d) Calculate the average wage of a 20-year old married male with 16 years of education and 104 weeks of experience. Do the same for a 20-year old married female with 12 years of education and 0 work experience.

e) By how much will wages change with an additional year of education?

f) Suppose male are systematically more likely to be in a union than females and that union wages are higher than non-union wages. What effect will re-running this regression with a union dummy variable included have on the male coefficient?

3. Over the past 35 years, an increasing number of mothers have gone back to work relatively quickly after giving birth. Consider a labor market where a worker’s wage is a function of his or her years of education past the compulsory level (E), work experience (X), and years of tenure with their current employer (T). Suppose the relationships between wages, education, experience, and tenure for males (M) and females (F) can be represented by the equations

WM = 3 + 0.5E + 0.4X + 0.2T

and

WF = 3 + 0.4E + 0.3X + 0.3T.

On average, E = 4, X =20, and T = 8 for men, while for women the averages are E = 4, X = 14, and T = 4.

A) Find the average wage of men and women. What is the ratio of female to male wages? What is the gap between women and men’s wages in percentage terms?

B) What wage would women earn if they had the same pre-market characteristics as men on average? What would be the ratio of women’s to men’s wages?

C) Express the amount of current wage discrimination in percentage terms.

Suppose in the analysis that years of tenure are either unmeasurable or unobservable to the researcher. As a result, the analysis produces the following wage equations.

WM = 4.6 + 0.5E + 0.4X

and

WF = 4.2 + 0.4E + 0.3X.

D) Find the average wage of men and women. What is the ratio of female to male wages? What is the gap between women and men’s wages in percentage terms?

E) What wage would women earn if they had the same pre-market characteristics as men on average? What would be the ratio of women’s to men’s wages?

F) Express the amount of current wage discrimination in percentage terms.

G) Does this (failing to include tenure in the model) overstate or understate the effects of gender discrimination?

1.Labor productivity is measured using the:

a. marginal output per worker.

b. average output per worker.

c. cost of labor inputs.

d. value of the goods produced by labor.

2.Federal tax and expenditure programs:

a. are somewhat effective means of redistributing income in the United States.

b. are not effective means of redistributing income in the United States.

c. have worsened the inequality of income in the United States.

d. have dramatically equalized income in the United States.

e. have worsened the inequality of income in the United States.

f. have dramatically equalized income in the United States.

3.

a. Which of the following statements is true on average?

b. Female executives earn less than male clerical workers.

c. Female machine operators earn more than female administrators.

d. Male and female service workers earn the same amount.

e. Professional specialists earn more than workers in precision production.

4.

When wages rise:

a. the quantity of labor supplied always declines.

b. neither the opportunity cost of an hour of leisure nor the quantity of labor supplied is likely to change.

c. the opportunity cost of an hour of leisure declines.

d. the opportunity cost of an hour of leisure increases.

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