Question 1

Temporary layoffs are common in the United States, especially among workers who are heavily invested with specific training. Why?

Accepted Answer

A)  Specific training deteriorates quickly, so a laid-off worker with specific training is not valuable to any firm. 
B)  The laid-off worker with specific training is more valuable to the firm that laid her off than she is to any other firm. Thus, it is in the worker's best interest to remain unemployed until recalled to work at her original firm. 
C)  Workers without specific training are never hired in the first place. 
D)  Workers with specific training know they do not need to work hard when employed. 
E)  Unemployment benefits are tied to specific training. 
A)  Specific training deteriorates quickly, so a laid-off worker with specific training is not valuable to any firm. 
B)  The laid-off worker with specific training is more valuable to the firm that laid her off than she is to any other firm. Thus, it is in the worker's best interest to remain unemployed until recalled to work at her original firm. 
C)  Workers without specific training are never hired in the first place. 
D)  Workers with specific training know they do not need to work hard when employed. 
E)  Unemployment benefits are tied to specific training.

Question 2

Higher values of the Gini coefficient are associated with

Accepted Answer

A)  greater education inequality. 
B)  greater income inequality. 
C)  less income inequality. 
D)  greater labor mobility. 
E)  less labor mobility. 
A)  greater education inequality. 
B)  greater income inequality. 
C)  less income inequality. 
D)  greater labor mobility. 
E)  less labor mobility.

Question 3

Wage differentials across individual workers are determined in part by

Accepted Answer

A)  effort. 
B)  productivity. 
C)  social capital. 
D)  luck. 
E)  All of these are determinants of wage differentials. 
A)  effort. 
B)  productivity. 
C)  social capital. 
D)  luck. 
E)  All of these are determinants of wage differentials.

Question 4

What is meant by the skill-bias technological explanation of increasing inequality?

Accepted Answer

A)  There has been increasing inequality over the last 40 years because unskilled workers use no technology. 
B)  There has been increasing inequality over the last 40 years among high-skilled workers. 
C)  Inequality has increased because technological advances have not kept pace with the demand for education. 
D)  Inequality has increased because technological advances over the last 40 years have complemented the productivity of skilled labor relative to unskilled labor. 
E)  Inequality has increased because technological advances over the last 40 years have complemented the productivity of unskilled labor relative to foreign labor. 
A)  There has been increasing inequality over the last 40 years because unskilled workers use no technology. 
B)  There has been increasing inequality over the last 40 years among high-skilled workers. 
C)  Inequality has increased because technological advances have not kept pace with the demand for education. 
D)  Inequality has increased because technological advances over the last 40 years have complemented the productivity of skilled labor relative to unskilled labor. 
E)  Inequality has increased because technological advances over the last 40 years have complemented the productivity of unskilled labor relative to foreign labor.

Question 5

Which one of the following statements about the Gini coefficient is not true?

Accepted Answer

A)  It reflects the data shown in the Lorenz curve. 
B)  It equals zero when there is perfect equality. 
C)  It increases as income inequality increases. 
D)  It must fall when the amount of income in an economy increases. 
E)  It equals one when there is perfect inequality. 
A)  It reflects the data shown in the Lorenz curve. 
B)  It equals zero when there is perfect equality. 
C)  It increases as income inequality increases. 
D)  It must fall when the amount of income in an economy increases. 
E)  It equals one when there is perfect inequality.

Question 6

In the context of intergenerational inequality, regression toward the mean is captured by which of the following?

Accepted Answer

A)  the tendency for inequality to be wider as a country experiences economic growth 
B)  the tendency for countries to diverge in their inequality 
C)  the tendency for income differences across families to get smaller over time as the various families move toward the mean income of the population 
D)  the tendency for the 90-50 wage gap to approach the 50-10 wage gap as a country experiences economic growth 
E)  the tendency for the tax code to erode inequality by targeting the mean tax rate to mean income 
A)  the tendency for inequality to be wider as a country experiences economic growth 
B)  the tendency for countries to diverge in their inequality 
C)  the tendency for income differences across families to get smaller over time as the various families move toward the mean income of the population 
D)  the tendency for the 90-50 wage gap to approach the 50-10 wage gap as a country experiences economic growth 
E)  the tendency for the tax code to erode inequality by targeting the mean tax rate to mean income

Question 7

Consider an economy with a particular distribution of income. Over the next 10 years, the income of all households increases by $20,000. How will the Gini coefficient change over those 10 years?

Accepted Answer

A)  The Gini coefficient will increase. 
B)  The Gini coefficient will decrease. 
C)  The Gini coefficient will stay the same as all households received the same increase in income. 
D)  The Gini coefficient will become more negative. 
E)  It is impossible to determine how the Gini coefficient will change as it will depend on the original income distribution. 
A)  The Gini coefficient will increase. 
B)  The Gini coefficient will decrease. 
C)  The Gini coefficient will stay the same as all households received the same increase in income. 
D)  The Gini coefficient will become more negative. 
E)  It is impossible to determine how the Gini coefficient will change as it will depend on the original income distribution.

Question 8

How does the income distribution in the United States compare to other developed countries?

Accepted Answer

A)  The income distribution is vastly more unequal in the United States compared to other developed countries. 
B)  The income distribution is vastly more equal in the United States compared to other developed countries. 
C)  The income distribution tends to be more unequal in the United States compared to other developed countries, but not by a huge amount. 
D)  The income distribution tends to be more equal in the United States compared to other developed countries, but not by a huge amount. 
E)  The income distribution must be the same in all developed countries, the United States included, because of increased globalization. 
A)  The income distribution is vastly more unequal in the United States compared to other developed countries. 
B)  The income distribution is vastly more equal in the United States compared to other developed countries. 
C)  The income distribution tends to be more unequal in the United States compared to other developed countries, but not by a huge amount. 
D)  The income distribution tends to be more equal in the United States compared to other developed countries, but not by a huge amount. 
E)  The income distribution must be the same in all developed countries, the United States included, because of increased globalization.

Question 9

What is the main selection issue researchers must address when trying to estimate the effectiveness of government training programs?

Accepted Answer

A)  The true cost of government training programs is unknown because unemployed workers also receive welfare benefits. 
B)  The most motivated unemployed workers are the ones who are also most likely to take advantage of government training programs. 
C)  Government training programs are usually geared toward developing general skills rather than providing specific job training. 
D)  Most government training programs are only offered to the unemployed and not to workers who would like to switch jobs. 
E)  Evaluation schemes tend to lose track of participants once they start a new job after the training. 
A)  The true cost of government training programs is unknown because unemployed workers also receive welfare benefits. 
B)  The most motivated unemployed workers are the ones who are also most likely to take advantage of government training programs. 
C)  Government training programs are usually geared toward developing general skills rather than providing specific job training. 
D)  Most government training programs are only offered to the unemployed and not to workers who would like to switch jobs. 
E)  Evaluation schemes tend to lose track of participants once they start a new job after the training.

Question 10

Expansions in globalization and the reduction of worldwide trade barriers during the 1980s and 1990s most likely had what effect on the demand for U.S. labor?

Accepted Answer

A)  The demand for unskilled workers increased, while the demand for skilled workers decreased. 
B)  The demand for unskilled workers decreased, while the demand for skilled workers increased. 
C)  The demand for unskilled and skilled workers increased. 
D)  The demand for unskilled and skilled workers decreased. 
E)  The demand for unskilled workers increased, while the demand for skilled workers did not change. 
A)  The demand for unskilled workers increased, while the demand for skilled workers decreased. 
B)  The demand for unskilled workers decreased, while the demand for skilled workers increased. 
C)  The demand for unskilled and skilled workers increased. 
D)  The demand for unskilled and skilled workers decreased. 
E)  The demand for unskilled workers increased, while the demand for skilled workers did not change.

Temporary layoffs are common in the United States, especially among workers who are heavily invested with specific training. Why?

Higher values of the Gini coefficient are associated with

Wage differentials across individual workers are determined in part by

What is meant by the skill-bias technological explanation of increasing inequality?

Which one of the following statements about the Gini coefficient is not true?

In the context of intergenerational inequality, regression toward the mean is captured by which of the following?

Consider an economy with a particular distribution of income. Over the next 10 years, the income of all households increases by $20,000. How will the Gini coefficient change over those 10 years?

How does the income distribution in the United States compare to other developed countries?

What is the main selection issue researchers must address when trying to estimate the effectiveness of government training programs?

Expansions in globalization and the reduction of worldwide trade barriers during the 1980s and 1990s most likely had what effect on the demand for U.S. labor?

Introduction to Labor Economics

Labor Supply

Labor Demand

Labor Market Equilibrium

Compensating Wage Differentials

Human Capital

Labor Mobility

Labor Market Discrimination

Labor Unions

Incentive Pay

Unemployment

Filters

Exam 7: The Wage Structure

Temporary layoffs are common in the United States, especially among workers who are heavily invested with specific training. Why?

Higher values of the Gini coefficient are associated with

Wage differentials across individual workers are determined in part by

What is meant by the skill-bias technological explanation of increasing inequality?

Which one of the following statements about the Gini coefficient is not true?

In the context of intergenerational inequality, regression toward the mean is captured by which of the following?

Consider an economy with a particular distribution of income. Over the next 10 years, the income of all households increases by $20,000. How will the Gini coefficient change over those 10 years?

How does the income distribution in the United States compare to other developed countries?

What is the main selection issue researchers must address when trying to estimate the effectiveness of government training programs?

Expansions in globalization and the reduction of worldwide trade barriers during the 1980s and 1990s most likely had what effect on the demand for U.S. labor?

Introduction to Labor Economics

Labor Supply

Labor Demand

Labor Market Equilibrium

Compensating Wage Differentials

Human Capital

Labor Mobility

Labor Market Discrimination

Labor Unions

Incentive Pay

Unemployment

Filters