Lec_18_wages

Lec_18_wages - Chapter 13: Labor Markets, Poverty, and...

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1 • Second exam over Chapters 10-12 on Wednesday Nov 16 • Answers to practice second exam will be reviewed in discussion sections week of Fri Nov 4 to Wed Nov 9 • An alternative practice exam is also available on the course web page • No class or discussion sections on Friday Nov 11 (Veterans Day university holiday) Chapter 13: Labor Markets, Poverty, and Income Distribution A. Demand for labor B. Firm versus industry labor demand C. Supply of labor D. Determinants of wages 1. Wages when all people have same abilities and same interests and all jobs look alike number of workers number of workers number of workers Industry 1 Industry 2 Whole economy wage wage wage VMP1 VMP2 total labor demand total labor supply W3 W3 W3 N3 N1 N2 N1 + N2 = N3 If all jobs and all people are alike, everybody should earn the same wage Chapter 13: Labor Markets, Poverty, and Income Distribution D. Determinants of wages 1. Wages when all people have same abilities and same interests and all jobs look alike 2. Wages when some people are unable or unwilling to do certain jobs Oil field workers today in North Dakota earn $90,000 on average Oil field workers today in North Dakota earn $90,000 on average
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2 Low skill jobs in ND Low skill jobs elsewhere number of workers number of workers (millions) wage wage N3 labor supply labor demand $25 K $90 K labor demand labor supply Definition: A compensating wage differential is a difference in the wage rate that reflects the attractiveness of a job’s working conditions Oil workers in North Dakota receive a positive compensating wage differential A compensating wage differential can be negative if people would want that job even if it pays less than others. Examples: • median income of dancers is $21,000 • median income of zoo workers is $16,500 Some jobs may require skills that many people do not have, or effort that many are unwilling to commit The average 30-year- old college graduate earns $15,000 more per year than high- school graduate The average 55-year-
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This note was uploaded on 03/02/2012 for the course ECON 2 taught by Professor Kim during the Fall '08 term at UCSD.

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Lec_18_wages - Chapter 13: Labor Markets, Poverty, and...

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