Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 19, Problem 9PA
To determine
Discrimination and wage level.
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Consider discrimination in employment. Suppose dark-haired employees don't like working with blonde employees. Could this discrimination explain lower wages for blond employees? If such a pay differential existed, what would an entrepreneur who wants to maximize profits do? If there were many entrepreneurs with the same strategy, what would happen over time?
Suppose male wages are determined by the earnings function WM = 25 + 0.40EM and female wages are determined by the earnings function WF = 15 + 0.20EF. If women have 10 years of experience and men have 20, what is the gender wage gap? How much can be attributed to human capital differences and how much is unexplained, and therefore attributed to discrimination? Show this scenario on a graph of both the male and female earnings functions
The U.S. Bureau of the Census reported that, on average, white men earn $50, 945, whereas white women earn $31,008.
Economic discrimination explains at least some of this wage gap, but economists think that there are other factors that also
contibute to wage gaps.
Which factor is not an explanation offered by economists for these types of wage gaps?
Various groups
in the population graduate from college at varying rates. Differences in earnings can be explained in part
by differences in educational attainment.
Men and women take different types of jobs. Men are more likely to prioritze jobs with higher wages, and women are
more likely to prioritize jobs with other desirable characteristics.
On average, men and women have different amounts of experience in their jobs. Ceteris paribus, men are less likely to
temporarily leave the workforce and, therefore, have more experience than women.
There are innate differences between men and women that make men more productive than women. Because…
Chapter 19 Solutions
Principles of Economics, 7th Edition (MindTap Course List)
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- Most studies indicate that women earn 82% of what men earn. Does this necessarily reflect discrimination or might there be other factors that could explain the difference? Be specific about what those factors are if any.arrow_forwardWhat is a factor where a portion of a wage gap may not be the result of discrimination? Explain why this factor is not a discriminatory practice.arrow_forwardSuppose there are two occupations: nurses and doctors. Draw hypothetical supply and demand graphs for male and female workers to both occupations assuming that some of each prefers each job. Now, assume that medical school admissions officers assume that women are unqualified to be doctors so all women find work as nurses. Show the effects of discrimination on your graph.arrow_forward
- Describe how the earnings gap between blacks and whites has evolved in recent decades.arrow_forwardDescribe how the earnings gap between men and women has evolved in recent decades.arrow_forwardKen recruits applicants for several prominent companies. Often when the companies call for Ken's services, they strongly hint that they do not wish to hire Southeast Asians, so Ken never places them with those companies. Is Ken liable for illegal discrimination? Only awnser please!arrow_forward
- Explain the arguments against discrimination in your own words.arrow_forwardUsing the concept of opportunity cost, explain why discrimination against any population group is economically inefficient?arrow_forwardAn example of a policy that combats discrimination is: Equal employment opportunity legislation Affirmative action legislation Equal pay legislation Pay equity or equal value legislation All of the abovearrow_forward
- Which of the following is an example of human capital discrimination? OA University is found guilty of discriminating against minorities in their admissions policy. A federal agency is found guilty of granting contracts only to firms owned and operated by white people. Women are crowded into nursing and teaching. Two employees, a man and a woman, have the same qualifications and experience, but the man is paid a higher wage. An employer refuses to hire minority people. A supply-side policy to reduce illegal drug usage would include A) Treatment programs for drug addiction. B) Clean needle exchange programs. O C Crop eradication.. O D) Education about the harm of illegal drugs.arrow_forwardhow we can think about unions, discrimination, and immigration in the labor discipline model. Just consider a worker who is a member of a union and the other who is not. Apply the same logic to man vs woman or race base comparison. Immigration is more complex. If you can apply immigration issues to the labor model, there will be bonuses for you all.arrow_forwardAssume we are investigating gender differences in labor market outcomes and we are analyzing employee discrimination. When discussing employee discrimination, the typical assumption is that two groups of workers are perfect substitutes. Some research, however, suggests that worker productivity rises when the diversity of the workforce in a firm increases. This implies that the marginal productivity of male workers increases as more female workers are hired. If employee discrimination occurs against women, under what conditions will a gender-segregated workforce exist? Will a wage gap between men and women exist? Explain your answer.arrow_forward
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