Suppose years of schooling, s, is the only variable that affects earnings. The equations for the weekly salaries of male and female workers are given by wm = 500 + 100s and wf = 300 + 75s.

On average, men have 14 years of schooling and women have 12 years of schooling.

(a)  What is the male-female wage differential in the labour market?

(b)  Calculate how much of this wage differential is due to discrimination and how much is due to difference in skills.

 

 

Posted Date: 2/28/2013 2:20:06 AM | Location : United States

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