LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
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Question
Chapter 8, Problem 5P
(a)
To determine
Determine how the welfare programs influence the incentive to migrate to Country U in terms of Roy model.
(b)
To determine
Determine the impact of the welfare program on the selection of the immigrant flow.
(c)
To determine
Identify the worker who is most likely to be attracted by the welfare program.
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Suppose the United States enacts legislation granting all workers, including newly arrived immigrants, a minimum income floor of y dollars. (Assume there is positive selection of migrants from the home country to the United States.)a. Generalize the Roy model to show how this type of welfare program influences the incentive to migrate to the United States. Ignore any issues regarding how the welfare program is funded.b. Does this welfare program change the selection of the immigrant flow? In particular, are immigrants more likely to be negatively selected than in the absence of a welfare program?c. Which types of workers, the highly skilled or the less skilled, are most likely to be attracted by the welfare program?
Would a massive, nationwide cessation of all welfare programs force the indolent to work?
What is the main goal of redistribution policies in welfare economics? A. To increase government revenue B. To reduce
income inequality C. To maximize consumer surplus D. To minimize deadweight loss
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- Suppose the immigrant flow from Lowland to Highland is positively selected. In order to mitigate the “brain drain” Lowland experiences as a result of this migration, public officials of Lowland successfully convince all Lowlanders who migrate to Highland to remit 10 percent of their wages to family members.a. What effect will this policy have on the immigrant flow?b. Provide a graph that details the extent to which this policy will limit the brain drain.arrow_forwardLabor economics What is positive/negative selection of migrants? What determines whether migrants are positive selected?arrow_forwardWhat is the poverty trap? Group of answer choices A)The situation where government assistance can result in a low or zero net gain for working. B)The situation where a person becomes unemployed and cannot find another job. C)The situation where a person becomes disabled and cannot work. D)The poverty trap occurs when a person is poor, and structural discrimination prevents that person from escaping poverty.arrow_forward
- Discuss how the wage-schooling locus is determined in the labor market, and why it is upward sloping and concave.arrow_forwardAssume that the labour market for mechanics is competitive and that it is differentiated into two groups: male and female. Assume that the mechanics in this market have vehicle repair ability regardless of whether they are male or female. Currently, the equilibrium wage in the female market is lower than in the male market. Further assume that the market for vehicle repair is competitive. If some consumers in the market for vehicle repair have a strong preference for having their vehicle repaired by a male mechanic, what will result? Question 34 options: The difference in wages will eventually disappear since vehicle repair is a homogeneous good. Mechanic shops that hire male mechanics will be able to charge a higher price for vehicle repair. Mechanic shops that hire female mechanics will be much more profitable. Mechanic shops that hire male mechanics will be much more profitable.arrow_forwardIn California, a welfare recipient is eligible for welfare benefits of $645. Benefits are reduced by 50 cents for every dollar of earnings. Consider Elizabeth, a resident of California, who can earn $10 per hour. a. If she works 10 hours, how much are her earnings, how much is her welfare benefit, and how much is her income? b. After Elizabeth works a certain number of hours, she does not receive any benefit at all. What is that number of hours? c. Use your answer to parts a and b to plot her budget constraint. d. Sketch a set of indifference curves consistent with Elizabeth's participating in the labor marketarrow_forward
- True or False. Explain why. Deniz’s preferences for consumption and leisure is as follows:U(C,L)=C2LDeniz has 100 hours in the week available to split between work and leisure. She earns $10 per hour after taxes. She also receives $260 worth of welfare benefits each week. Deniz’s optimal amount of leisure time will be 45 whereas labour supply will be 55.arrow_forwardThe classic model of the labor market clearly shows that an increase in the supply of labor (new workers) reduces wages. Explain, in your own words, why this is an incomplete story and we should consider changes in the demand for labor as well when we try to model the effects of immigration.arrow_forwardWhy can welfare programs, if not managed correctly, create work disincentives?arrow_forward
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