Question

In: Economics

Differences in labor earnings are the result of wage differentials and the number of hours worked....

Differences in labor earnings are the result of wage differentials and the number of hours worked. Explain each of the following reasons for wage differentials: (a) occupational immobility, (b) compensating differentials, (c) cost of acquiring skills and (d) geographical immobility.

Solutions

Expert Solution

Wage differentials is a term used in economics which is used to explain the difference in wage payments given to same skilled labour in different industries or region. There may be different reasons for such differences in wage.

A)occupational immobility: occupational immobility is when a labour cannot switch between different occupations and hence is limited to one occupation maybe because he doesn't possess still set for another job

B) Compensating differentials in wage differentials is when a person is paid more than the income, a compensation, in order to provide for an incentive for him to do an undesirable work or something he wouldn't do at the existing income.

C) cost of acquiring skills is when a person cannot acquire a certain skills because it is not affordable by him and hence he is forced to do a job which requires lower skills and therefore he earns a lower income.

D) Geographical immobility is when the labour is immobile and it is not physically possible for him to transport to different locations and he is bound by Geographical proximity which makes him work in that location only this makes the worker unable to travel to different locations with bigger wages and therefore wages differ.


Related Solutions

2.       Economists argued that temporary labor wage differentials tend to be eroded by labor mobility. Consider the...
2.       Economists argued that temporary labor wage differentials tend to be eroded by labor mobility. Consider the two markets for sheet-iron workers and steel-pipe workers in the same region. Suppose both markets are competitive. We begin in a situation in which both sheet-iron workers and steel-pipe workers earn $20 per hour. Assume that workers can switch easily between the two jobs. a.       Draw diagrams showing the supply and demand for labor in each market. b.      Now suppose there is a sharp increase in...
Would you consider Labor (number of hours worked) as a normal or an inferior good? Explain...
Would you consider Labor (number of hours worked) as a normal or an inferior good? Explain your answer in details in line with the theory covered in class. As a policy maker managing human resources, what would be the advantages and disadvantages of having Labor as an inferior good?
Discuss a labor market with two sectors which have wage differentials. Illustrate the labor force dynamics...
Discuss a labor market with two sectors which have wage differentials. Illustrate the labor force dynamics between these two sectors and explain your graphs in words
standard labor hours per unit 4.5 hours standard labor rate $17 per hour actual hours worked...
standard labor hours per unit 4.5 hours standard labor rate $17 per hour actual hours worked 2,000 hours actual labor $38,000 actual output 500 units What is the labor efficiency variance? $4,250 favorable $1,500 unfavorable $4,250 unfavorable $1,500 favorable Which is correct?
Question    1. Discuss how customer discrimination can result in wage differentials between two groups of...
Question    1. Discuss how customer discrimination can result in wage differentials between two groups of workers. (6) 2. List three types of labour market immobilities and give an example for each. (6)
Write a function called compute_pay that accepts arguments representing the hourly wage of an employee and the number of hours that employee worked this week.
Python RephactorCompute Take Home PayWrite a function called compute_pay that accepts arguments representing the hourly wage of an employee and the number of hours that employee worked this week. The function should return the take home pay owed to the employee as a floating point value rounded to two decimal places.The normal work week is 40 hours, and the company pays employees "time and a half" for overtime. So, the total wages is the sum of regular wages and overtime...
Given conditions, complete the wage calculation Craft-Mason Wage rate-$26.00 per hour Hours worked-50 hours per week...
Given conditions, complete the wage calculation Craft-Mason Wage rate-$26.00 per hour Hours worked-50 hours per week for 18 weeks and 40 hours per week for 19 weeks Paid vacation, holidays, and sick leave-Three weeks at 40 hours per week Overtirne-Time-and-a-halffor any hours over 40 per week Gas allowance-$100 per month Annual bonus-$500 Social security-6.2 percent on the first $106,800 of wages Medicare-lAS percent ofallwages FUTA-0.8 percent on the first $7,000 of wages SUTA--4.5 percent on the first $18,000 ofwages Worker...
The table to the right lists the average number of hours worked in a week and...
The table to the right lists the average number of hours worked in a week and the average weekly earnings for U.S. production workers from 1967 to 1996. (The World Almanac 1998) 1) Construct a scatter diagram and comment on the relationship, if any, between the variables Weekly Hours and Weekly Earnings. 2) Determine and interpret the correlation for hours worked and earnings. Based upon the value of the correlation, is your answer to the previous question reasonable? 3) Based...
The following data shows the hours worked by employees at a McDonalds and the number of...
The following data shows the hours worked by employees at a McDonalds and the number of dollars that they earned that day. Hours worked Pay dollars 8 68 7 59.5 8 68 5 42.5 10 85 8.5 72.25 7.5 63.75 9 76.5 Average: 7.875 66.9375 Standard Deviation 1.482035 12.5973 Correlation 1 a)Draw a scatterplot that represents this data. Draw an estimate for the line of least fit on the scatterplot as well. b) Use technology to find the least squares...
When wage changes, the amount of hours worked can either increase or decrease depending on the...
When wage changes, the amount of hours worked can either increase or decrease depending on the relative strengths of the income and substitution effects. a) Define the income and substitution effects. b) Suppose you initially work 8 hours. Your wage increases and you decide to work 7 hours. Which effect dominates? c) State the range of values that the substitution effect could be in part (b) in terms of hours of leisure. In other words, what is the largest and...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT