16、Suppose years of schooling, s, is the only variable that affects earnings. The equations for the...

16、Suppose years of schooling, s, is the only variable that affects earnings. The equations for the weekly salaries of male and female workers are given by: wm = 400 + 200s and wf = 200 + 80s. On average, men have 16 years of schooling and women have 13 years of schooling. Using these data, calculate the three measures of discrimination and compare them. Is the discrimination (if any) serious? Explain.

Solutions

Expert Solution

Wages of men = 400 + 200s

Wages of women = 200 + 80s

Discriminations are:

If none of them go to school, men get wage of 400 while women get wage of 200 which is 50% of what men gets.
As men have 16 years of schooling while women have 13 years. We can say that people prefer sending their male childs for further education.
The marginal wage of men is 200 per year of schooling while it is 80 for women. It means that even if women are equally qualified, she will get a lower wage.

Serious discrimination as per is the less number of year of study of women as comparative to men while other can be changed in short span of time. This discrmination will take many years to change social thinking.

Rahul Sunny answered 1 year ago

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