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19. Earnings and Discrimination

Principles of Economics, 4th Edition (Student Edition)

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April 2, 2008 1 19. EARNINGS AND DISCRIMINATION compensating differential a difference in wages that arises to offset the nonmonetary characteristics of different jobs discrimination the offering of different opportunities to similar individuals who differ only by race, ethnic group, sex, age, or other personal characteristics efficiency wages above-equilibrium wages paid by firms to increase worker productivity human capital the accumulation of investments in people, such as education and on-the-job training strike the organized withdrawal of labor from a firm by a union union a worker association that bargains with employers over wages and working conditions 1. Some Determinants of Equilibrium Wages a. Compensating Differentials
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Unformatted text preview: b. Human Capital c. Ability, Effort, and Change d. An Alternative View of Education: Signaling e. The Superstar Phenomenon f. Above-Equilibrium Wages: Minimum-Wage Laws, Unions, and Efficiency Wages Define compensating differential and give an example. Give two reasons more educated works earn more than less educated workers. 2. The Economics of Discrimination a. Measuring Labor-Market Discrimination b. Discrimination by Employers c. Discrimination by Customers and Governments Why is it hard to establish whether a group of works is being discriminated against? Explain how profit-maximizing firms tend to eliminate discriminatory wage differentials. How might a discriminatory wage different persist?...
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