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Chapter 11

ECON-2086EL Chapter Notes - Chapter 11: Rbc Bank, Unemployment Benefits, Neoliberalism


Department
Economics / Science Èconomique
Course Code
ECON-2086EL
Professor
Bougrine
Chapter
11

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Chapter 11 Part I Why Some People
Earn More Than Others
The Economic Position of Some Prominent and Some Ordinary Canadians
In this section, the author displays the salaries of some prominent Canadians: Celine Dion
($100,000,000), RBC Bank Executive ($9,500,000), Stephen Harper ($315,000). And some
ordinary Canadians: Paul M. ($62,200); Leslie B. ($29,000); Arun H. ($26,300). This is just to
name a few.
There is large wage gaps in the graphs. In the next section, the author uses theory to explain the
wage differences among these Canadians (and others).
What Are the Causes of These Differences in Earnings?
Below, the causes will be broken up into observable cause and unobservable. Similarly, those
causes will be deemed acceptable and unacceptable.
Acceptable
Unacceptable
Observable
Education
Skills
Type of job and level of
responsibility
Race
Gender
Ethnicity
Place of birth
Unobservable
Work effort
Innate talent
Religion
Sexual orientation
Human Capital
- Observable and Acceptable
- Education contributes to the level of human capital, knowledge, and skills one may have
that contributes to their level of wages
- Skills learned on the job or over time are important to the level of human capital one
brings
- Higher levels of human capital are observable (on a resume, skills list, diploma, etc.) and
contribute higher productivity
Compensating Wage Differentials
- Observable and Acceptable
- The type of job and level of responsibility is important when determining wages
- Jobs that are more dangerous may be compensated with higher wages
- It can be determined by whether the job is dangerous or not, enjoyable or not, and
responsibility (theory of compensating wage differentials)
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