When Alan Greenspan (an economist who wouldlater chair the Federal Reserve) ran a consulting firmin the 1960s, he primarily hired female economists. Heonce told the New York Times, “I always valued menand women equally, and I found that because othersdid not, good women economists were cheaper thanmen.” Is Greenspan’s behavior profit-maximizing? Isit admirable or despicable? If more employers werelike Greenspan, what would happen to the wagedifferential between men and women? Why mightother economic consulting firms at the time not havefollowed Greenspan’s business strategy?
When Alan Greenspan (an economist who wouldlater chair the Federal Reserve) ran a consulting firmin the 1960s, he primarily hired female economists. Heonce told the New York Times, “I always valued menand women equally, and I found that because othersdid not, good women economists were cheaper thanmen.” Is Greenspan’s behavior profit-maximizing? Isit admirable or despicable? If more employers werelike Greenspan, what would happen to the wagedifferential between men and women? Why mightother economic consulting firms at the time not havefollowed Greenspan’s business strategy?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
When Alan Greenspan (an economist who would
later chair the Federal Reserve) ran a consulting firm
in the 1960s, he primarily hired female economists. He
once told the New York Times, “I always valued men
and women equally, and I found that because others
did not, good women economists were cheaper than
men.” Is Greenspan’s behavior profit-maximizing? Is
it admirable or despicable? If more employers were
like Greenspan, what would happen to the wage
differential between men and women? Why might
other economic consulting firms at the time not have
followed Greenspan’s business strategy?
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