Final, Form A Winter 2007 C. Tremblay

Transcription

1 ECON 383 Final, Form A Winter 2007 C. Tremblay Name INSTRUCTIONS: This exam is worth 140 points. Point values for each question are listed to the right of each question number. The exam is closed book and notes, and no calculators are allowed. Label all axes and curves of graphs. You may leave answers in fraction form. Good luck. 1. (15 points) In Becker s model of discrimination, he describes 3 different forms of prejudice (discriminatory tastes). a. List these 3 types of prejudice. b. For each type of prejudice, state whether it results in wage discrimination in the short run, under the assumptions of the model. Write yes or no. 2. (8 points) In the study of the Weakest Link game show, what did Steven Levitt find about discrimination against various groups? Indicate in the table below, whether he found evidence of statistical discrimination, taste-based discrimination, or no discrimination for each group listed by marking an X in the appropriate boxes. Group Statistical Discrimination Taste-Based Discrimination No Discrimination African Americans Women Latinos Elderly

2 3. (13 points) Consider Jack s college investment decision. Jack is18 years old and plans to retire at 65. If Jack decides to go to college, he will attend for 4 years. a. In the graph below, what does the curve EF represent? b. What does the profile ABCD represent? c. Using letters/numbers to identify areas, what area represents the direct costs of going to college? d. Using letters and numbers again, what area represents the indirect costs of attending college? e. If Jack were going to be out of the labor force from age 28 through age 38, the difference (e 1 - e 2) would be relevant to his college investment decision. What is the name of the term, (e - e )? 1 2

3 4. (8 points) Circle the groups listed below who are protected under the Equal Pay Act of 1963: African-Americans Catholics Women Veterans Men Homosexuals Older Persons Disabled Persons 5. (6 points) List 2 examples of statistical discrimination in American society. 6. (16 points) Consider a hypothetical economy, the Galaxy economy, consisting of 2 types of workers, stars and comets. The mean wage for the stars is 21 and for the comets is 50. The mean level of education for the stars is 10 and is 12 for the comets. There are no productivity factors other than education. Data are collected on wages (W) and education levels (ED) for the stars and for the comets, and the following regressions are estimated. s Stars: W = ED c Comets: W = ED a. For this economy, what is the value of the unadjusted wage ratio for stars relative to comets? (You may leave your answer in fraction form.) b. Write down the formula for the adjusted wage ratio in the general case, where s s s W = b 1 + b 2 ED c c c W = b 1 + b 2 ED Define the terms in the ratio. c. Calculate the adjusted wage ratio for the stars relative to the comets in Galaxy. d. Does there appear to be wage discrimination against the stars, wage discrimination against the comets, or no wage discrimination in this economy?

4 7. (6 points) List 2 tactics that were used to keep African Americans from voting during Dr. Martin Luther King, Jr. s time. 8. (6 points) List 2 examples of human capital investments other than education, specific training or general training. 9. (12 points) For each of the following pairs of types of evidence, circle the type of evidence that is more reliable in evaluating the extent of discrimination: a. Facts or Personal experience b. Urban Institute Audit study or Neumark s audit study of restaurants c. Urban Institute Audit study or 20/20 John Stossel Audit study d. Bertrand and Mullainathan resume study or Steinpreis resume study e. Steinpreis resume study or our in-class resume study f. Facts or Tabular statistics (like the examples that we discussed in class)

5 10. (24 points) The table below shows 3 types of empirical evidence from studies on discrimination indicated by the column headings. The results from these studies may or may not be consistent with wage or hiring discrimination against various groups. For each type of study, mark an X in the box or boxes in the column that correspond with the findings of the study. For example, if you thought that adjusted wage ratio estimates were consistent with wage discrimination against women, you would mark an X in the upper left-hand box of the table. Findings indicate: Adjusted Wage Ratio 1991 Urban Institute Audit Study Bertrand and Mullainathan Resume Study Wage Discrimination Against Women Wage Discrimination Against Men Wage Discrimination Against African Americans Wage Discrimination Against Whites Women Men African Americans Whites

6 11. (26 points) Circle T if the statement is true or F if the statement is false. T F Relative to continuous workers, people who are expecting one or more spells out of the labor force are more likely to choose general training than specific training. T F One reason why African Americans have lower earnings than whites is because they have a lower union membership rate than whites. T F The unemployment rate is higher for men than for women. T F When an individual leaves the workforce for a period of time and then reenters, the wage is lower than when they left but rises quickly. This steep rise in the age-earnings profile is called the feedback effect. T F Marginal revenue product of labor is the additional revenue obtained by using 1 more unit of labor, ceteris paribus. T F A discrimination coefficient greater than 1 indicates reverse discrimination. T F According to economic theory, minority workers should face less wage discrimination in competitive than in noncompetitive labor markets. T F The earnings ratio for African-Americans relative to whites who are college graduates is lower than the earnings ratio for African-Americans relative to whites who have a high school degree but never attended college. T F In the study using fictitious resumes for Brian Miller and Karen Miller, the difference between the fraction of professors that recommended hiring Brian Miller was greater than the fraction recommending Karen Miller in all of the disciplines that were sampled. T F In the study, Orchestrating Impartiality, it was found that when women musicians were on the jury for hiring a new musician, the probability that a female musician would be hired increased. T F Comparable worth policy increases wages of men who are employed in female-dominated occupations. T F The unemployment rate is the number of persons who are unemployed divided by the population aged 16 and over. T F According to Bergmann s Overcrowding Hypothesis, women choose occupations consistent with traditionally female roles which results in crowding in female-dominated occupations and lower wages for women relative to men.