Suppose that, on average, men earn $17 an hour and have an average of 15 years of schooling. Women earn $15 an hour and have an average of 14 years of schooling. If the estimated return to schooling for men is 0.30 (implying that each additional year of schooling translates into an additional 30 cents per hour) and the returns for schooling for women is 0.2, then the gender gap in schooling explains: 10% of the wage gap between men and women. 20% of the wage gap between men and women. 30% of the wage gap between men and women. 15% of the wage gap between men and women.
Suppose that, on average, men earn $17 an hour and have an average of 15 years of schooling. Women earn $15 an hour and have an average of 14 years of schooling. If the estimated return to schooling for men is 0.30 (implying that each additional year of schooling translates into an additional 30 cents per hour) and the returns for schooling for women is 0.2, then the gender gap in schooling explains: 10% of the wage gap between men and women. 20% of the wage gap between men and women. 30% of the wage gap between men and women. 15% of the wage gap between men and women.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:**Understanding the Gender Gap in Schooling and Its Impact on Wage Disparity**
In a study analyzing wage differences:
- **Men** earn, on average, $17 an hour. They typically have 15 years of schooling.
- **Women** earn, on average, $15 an hour. They typically have 14 years of schooling.
The returns to schooling, which measure how much additional schooling translates into increased hourly earnings, are:
- **Men**: $0.30 per additional year of schooling.
- **Women**: $0.20 per additional year of schooling.
**Question:** Given this data, what percentage of the wage gap between men and women is explained by the difference in schooling?
**Options:**
- 10% of the wage gap.
- 20% of the wage gap.
- 30% of the wage gap.
- 15% of the wage gap.
This question encourages students to assess how educational attainment impacts wage disparities between genders.
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