Chapter 19 Econ notes

Chapter 19 Econ notes - conditions o Keeps wages above...

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Chapter 19 Compensating differential – a difference in wages that arise to offset the non-monetary characteristics of different jobs Human capital: Education, training, on-the-job training The accumulation of investments in people Wages increase with skill increases High school Some college Bachelor’s degree Master’s degree Ph.D. Superstar effect: Huge increase in wage due to personal characteristics and skills Signaling – education level signals capability Reasons for Above-equilibrium wages: Minimum wage laws (price floor) Union – a worker or association that bargains with employers over wages and working
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Unformatted text preview: conditions o Keeps wages above equilibrium for its members • Efficiency wages – above equilibrium wages paid by firms to increase worker productivity o Health issues o Content with job – reduced turnover Discrimination – offering of different opportunities to similar individuals who differ only by race, ethnicity, sex, age, or other personal characteristics Median Annual Earnings by race and sex • White male – 41,200 • Black male – 32,300 • White female – 31,100 • Black female – 26,900...
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