Question

Assume in USA economy can be divided into two sectors, production and service sectors and 50% of people oldert han 30 within the labor force work in production sector, while only 10% of people younger than 30 within the labor force work in the production sector, while 10% of men and 20% of women within the labor force work in production sector. For both groups, the rest of the workers works in the service sector. (Assume there is no unemployment.)
a) Calculate the DID for young and old people in the USA.
b) Calculate DID for men and women in the USA.
c) What is the percentage of the old people that should switch sectors so that there won’t be any occupational segregation for young and old people in the USA?
d) What is the percentage of the women that need to switch sectors, so that there won’t be any occupational segregation for men and women in the USA?

Answer 1

a) Let total workforce of USA= x

then people older than 30 working in production sector = x*50%= 50/100*x =1/2x

and people younger than 30 working in production sector = x*10%= 10/100*x =1/10x

Therefore DID ratio for young and old people in USA= 1/10x/1/2x= 1/5=1:5

b) Again total number of men working in production sector= 10%*x= x/10

and total number number of women working in production sector = 20%*x= x/5

Therefore, DID ratio for men and women in the USA= x/10/x/5= 1/2=1:2

c) Percentage of people older than 30 working in production sector =50%

therefore, 40% of older people should switch to different sector i.e., service sector so that percentage of young and older people become the same and there is no occupational segregation of young and old people in USA.

d) Percentage of women working in production sector =20%

Therefore, 10% of women should switch to service sector so that there is no occupation segregation of men and women in USA i.e., percentage of men and women employed in production sector becomes equal at 10%.