8 Equilibrium%201 - Next class(9/21 Problem Set 2 due(at...

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  Next class (9/21): Problem Set 2 due (at the beginning of class) Read Landsburg, “The Sin of Wages” Next Next Tuesday (9/28): Midterm 1, in class
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    Introduction to Labor Economics    
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 Skill-biased Technological Change Labor Market Equilibrium Applications of the Supply and Demand Model Taxes Mandated Benefits
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      How do technological improvements affect wages and the gap between high and low skill workers? Krueger (1993) examined the sharp increase of desktop computers in workplaces. Focus on question and method
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   What does theory tell us about how an increase in computers may affect demand for labor?
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   Question: Do employees who use computers at work receive a higher wage as a result of their computer skills? What is the ideal experiment?
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   Data: October 1984 and 1989 CPS The survey asked about computer use at work. Estimation:        are parameters to be estimated indicates computer use at work, are covariates
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   C w 0 1 w 1 avg w 0 avg
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   C w 0 1 w 1 avg w 0 avg Finds wages for computer users are 20% higher.
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Should we believe these findings? What is a potential problem? Fixes: Computer use at home. Within narrow occupations
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8 Equilibrium%201 - Next class(9/21 Problem Set 2 due(at...

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