MEcon Master of Economics Labor Economics and Human Capital 2

Question 1

The returns to schooling estimated by Jacob Mincer's earnings equation represent:

Accepted Answer

The private wage return per additional year of schooling

Answer

The Mincerian earnings equation regresses log wages on years of schooling and experience, with the schooling coefficient capturing the average percentage increase in earnings per additional school year.

Question 2

Labor force participation rate is calculated as:

Accepted Answer

(Employed + Unemployed) / Working-age population

Answer

The labor force participation rate equals the labor force (employed plus unemployed actively seeking work) divided by the civilian non-institutional working-age population.

Question 3

According to the job search model, a higher unemployment insurance benefit tends to:

Accepted Answer

Raise unemployment duration by increasing reservation wages

Answer

Higher UI benefits raise the reservation wage (the minimum acceptable wage offer), leading unemployed workers to search longer before accepting a job, extending unemployment duration.

Question 4

Collective bargaining by unions typically raises wages for union members primarily through:

Accepted Answer

Exercising monopoly power over labor supply in covered sectors

Answer

Unions act as a monopoly seller of labor, setting wages above the competitive level through collective negotiation backed by the threat of strikes and withdrawal of labor.

Question 5

The gender wage gap adjusted for occupation, hours, and experience is sometimes called the:

Accepted Answer

Unexplained wage gap or residual gap

Answer

After controlling for observable productivity factors, the residual gap measures unexplained differences potentially attributable to discrimination, unmeasured skills, or cultural factors.

MEcon Master of Economics Practice Test

MEcon Master of Economics Practice Test

MEcon Master of Economics Labor Economics and Human Capital 2