ECONOMICS
hw1

# hw1 - 180.351 Labor Economics Homework Assignment 1 Yuya...

• Homework Help
• 2

This preview shows pages 1–2. Sign up to view the full content.

180.351 Labor Economics Homework Assignment 1 Yuya Takahashi February 9 2016 Solve the following 3 big questions. The full score is 100. Students are encouraged to work as a group, but each student should write her/his own answer. The due is Feb. 18 in class. 1. (36 points in total) Answer the following questions (drawing a graph helps a lot!). (a) Consider the wage regression we discussed in class: ln w i = ° + ±s i + ² i + " i ; where s i is the number of years of schooling, ² i measures the true unobserved ability, and " i is a pure error which is not correlated with s i : If you regress ln w i on s i by OLS, would you get a consistent estimate for ± ? If yes, justify your answer. If no, explain why not. (b) Suppose that the worker°s wage is initially \$8 per hour and that he works 20 hours per week. Now the wage increases to \$10 per hour and the worker decides to work 30 hours per week. Calculate the labor supply elasticity of this worker. (c) Recall the analysis of the impact of a wage increase on hours of work. Suppose that for an individual an increase in wage did NOT change hours of work. Using a graph, explain how this happened.

This preview has intentionally blurred sections. Sign up to view the full version.

This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern