2. Imagine a labor market in which employers believe that \"all black workers ar

Question

2. Imagine a labor market in which employers believe that "all black workers are basically the same." As a result, they pay no attention to the qualifications of individual black workers and base their wage offers to blacks only on their beliefs about the black group average. l'or tins labor market, fill in 'he Ilanks in the luatMMIx:low with appropnar unlxTS: Wage offered to blacks-xT) + (x T) b. Assume that workers can improve their score on the test by 10 points if they go to college. Given your answer to part a, what will the wage gain from going to college be for blacks? Note: I personaly think that this model describes the labor market in the US south fairhy accuratelhy for the period betwveen emancipation and the 1964 Ciril Rights Ad, and is also consistent with the results of the BertrandMullainathan audit study we discussed

Explanation / Answer

a). Wage offered to Black population on an average. T = proportion of skilled blacks. T^ = proportion of unskilled blacks.

b). The workers will not gain anything if the majority of blacks are not qualified enough and will be continued to be paid the old wage rate. This is because the owners will take into acount the average qualification of blacks, and not on an individual basis.

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.