Questions from Labor Economics

Q: Suppose the decision to acquire schooling depends on three factors—preferences

Suppose the decision to acquire schooling depends on three factors—preferences (joy of learning), costs (monetary and psychic), and individual-specific returns to education. a. Explain how each of the...

Q: Peter lives for three periods. He is currently considering three alternative

Peter lives for three periods. He is currently considering three alternative educationwork options. He can start working immediately, earning $100,000 in period 1, $110,000 in period 2 (as his work ex...

Q: Jane has three years of college, Pam has two, and

Jane has three years of college, Pam has two, and Mary has one. Jane earns $21 per hour, Pam earns $19, and Mary earns $16. The difference in educational attainment is due completely too different dis...

Q: Suppose the skills acquired in school depreciate over time, perhaps because

Suppose the skills acquired in school depreciate over time, perhaps because technological change makes the things learned in school obsolete. What happens to a worker’s optimal amount of schooling if...

Q: a. Describe the basic self-selection issue involved whenever discussing

a. Describe the basic self-selection issue involved whenever discussing the returns to education. b. Does the fact that some high school or college dropouts go on to earn vast amounts of money (for ex...

Q: Suppose Carl’s wage-schooling locus is given by Years

Suppose Carl’s wage-schooling locus is given by Years of Schooling………….Earnings 9…………………………………..$18,500 10………………………………….$20,350 11….………………………………$22,000 12…………………………………$23,100 13………………………………..$23,900...

Q: Suppose people with 15 years of schooling average earnings of $60

Suppose people with 15 years of schooling average earnings of $60,000 while people with 16 years of education average $66,000. a. What is the annual rate of return associated with the 16th year of edu...

Q: Suppose there are two types of persons: high-ability and

Suppose there are two types of persons: high-ability and low-ability. A particular diploma costs a high-ability person $8,000 and costs a low-ability person $20,000. Firms wish to use education as a s...

Q: Some economists maintain that the returns to additional years of education is

Some economists maintain that the returns to additional years of education is actually quite small but that there is a substantial “sheepskin” effect whereby one re...

Q: Evaluate the validity of the following claim: The increasing wage gap

Evaluate the validity of the following claim: The increasing wage gap between highly educated and less-educated workers will itself generate shifts in the U.S. labor market over the next decade. As a...