(From O'Sullivan, 5.2) Consider a city where the initial wage of high-school dropouts is $10. Suppose the city's share of college educated workers increases by 2 percent. Use a demand-supply graph of the labor market for high school dropouts to show the effects on the dropout wage. Note that Moretti (2004) estimates that a 1 percent increase in a city's share of college educated workers increases the wage of high-school dropouts by 1.9 percent.

(From O'Sullivan, 5.2) Consider a city where the initial wage of high-school dropouts is $10. Suppose the city's share of college educated workers increases by 2 percent. Use a demand-supply graph of the labor market for high school dropouts to show the effects on the dropout wage. Note that Moretti (2004) estimates that a 1 percent increase in a city's share of college educated workers increases the wage of high-school dropouts by 1.9 percent.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter5: Supply, Demand, And Price: Applications

Section: Chapter Questions

Problem 11QP

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