Question

1. Which of the following regarding internal migration in the United States is not true?

1. Migration is most common among young workers.
2. Migration is most common among educated workers.
3. Migration equalizes wage across all regions if one condition on skill level.
4. Empirically, the mystery is why there is not more internal migration, not why there is not less.
5. Repeat and return migration are substantial.

2. In the standard Becker model of discrimination, each firm is associated with a discrimination coefficient of d > 0 and acts as if the wage paid to blacks is WB(1+d) where WB is the equilibrium, a threshold level of d, labeled d*, comes about that sorts firms based on hiring decisions. Which of the following is not an outcome of this model?

1. All firms will d ≠ d will employ all blacks or whites.
2. In the long run, discrimination will be competed away in a competitive labor market.
3. All discriminating firms hire only white workers.
4. All firms with d > d* earn the same amount of profit.
5. Profits fall as d increases as long as d < d*

Answer 1

1> c> Migration equalizes wage across all regions if one condition on skill level

This is not true for the US. There are many workers in India and China who are as skilled as the workers in the US but they are earning 1/6th of the income they could have earned in the US, so equalization of the wage does not happen.

2> c> All discriminating firms hire only white workers.

That is not the outcome of this model. The model predicts that all the firms with discriminant coefficient more than d* will have only white workers, not for those with a lower level of discrimination.