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Consider the labor market for public school teachers. Teachers typically choose jobs (or schools) based on salary, amenities, and school characteristics. In particular, one would reasonably ex- pect that high-crime school districts pay higher wages than low-crime school districts, because most teachers should prefer working in a safer environment. To test this hypothesis, you collect data on salaries, characteristics of teachers, and character- istics of schools and school districts for all teachers of public high schools in a typical U.S. city. You find that schools in high-crime districts tend to pay lower wages than schools in low-crime districts. Does the finding go against the theory of compensating wage differentials? Why? (Hint: The primary source of funding for teacher salaries of the city is local property taxes.) (15 points)

Consider the labor market for public school teachers. Teachers typically choose jobs (or schools) based on salary, amenities, and school characteristics. In particular, one would reasonably ex- pect that high-crime school districts pay higher wages than low-crime school districts, because most teachers should prefer working in a safer environment. To test this hypothesis, you collect data on salaries, characteristics of teachers, and character- istics of schools and school districts for all teachers of public high schools in a typical U.S. city. You find that schools in high-crime districts tend to pay lower wages than schools in low-crime districts. Does the finding go against the theory of compensating wage differentials? Why? (Hint: The primary source of funding for teacher salaries of the city is local property taxes.) (15 points)

Microeconomics: Private and Public Choice (MindTap Course List)
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter13: Earnings, Productivity, And The Job Market
Section: Chapter Questions
Problem 3CQ
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Consider the labor market for public school teachers. Teachers typically choose jobs (or schools) based on salary, amenities, and school characteristics. In particular, one would reasonably ex- pect that high-crime school districts pay higher wages than low-crime school districts, because most teachers should prefer working in a safer environment. To test this hypothesis, you collect data on salaries, characteristics of teachers, and character- istics of schools and school districts for all teachers of public high schools in a typical U.S. city. You find that schools in high-crime districts tend to pay lower wages than schools in low-crime districts. Does the finding go against the theory of compensating wage differentials? Why? (Hint: The primary source of funding for teacher salaries of the city is local property taxes.) (15 points)
Transcribed Image Text:Consider the labor market for public school teachers. Teachers typically choose jobs (or schools) based on salary, amenities, and school characteristics. In particular, one would reasonably ex- pect that high-crime school districts pay higher wages than low-crime school districts, because most teachers should prefer working in a safer environment. To test this hypothesis, you collect data on salaries, characteristics of teachers, and character- istics of schools and school districts for all teachers of public high schools in a typical U.S. city. You find that schools in high-crime districts tend to pay lower wages than schools in low-crime districts. Does the finding go against the theory of compensating wage differentials? Why? (Hint: The primary source of funding for teacher salaries of the city is local property taxes.) (15 points)
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