Question 1

The earnings function is endogenous because

Accepted Answer

A)  Higher earnings may cause individuals to consume more education 
B)  Ability is correlated with the consumption of education 
C)  Those from richer families are not credit constrained in choosing how much education to consume 
D)  Of all of these reasons. 
A)  Higher earnings may cause individuals to consume more education 
B)  Ability is correlated with the consumption of education 
C)  Those from richer families are not credit constrained in choosing how much education to consume 
D)  Of all of these reasons. D

Question 2

The incentive to train is a function of

Accepted Answer

A)  The degree of monopsony power in the labour market 
B)  The degree of wage compression 
C)  The extent of unionisation 
D)  The extent of local unemployment. 
A)  The degree of monopsony power in the labour market 
B)  The degree of wage compression 
C)  The extent of unionisation 
D)  The extent of local unemployment. B

Question 3

The Mincer human capital model uses years of schooling because

Accepted Answer

A)  This is an accurate measure of an individual 
B)  Returns to schooling are linear 
C)  Returns are no higher in the years in which qualifications are obtained 
D)  At the time Mincer undertook his studies US education statistics were compiled in this form. 
A)  This is an accurate measure of an individual 
B)  Returns to schooling are linear 
C)  Returns are no higher in the years in which qualifications are obtained 
D)  At the time Mincer undertook his studies US education statistics were compiled in this form. D

Question 4

Governments may intervene in the provision of training

Accepted Answer

A)  Because governments are more efficient in the providing such training 
B)  Because employers cannot afford to train workers 
C)  Because there are skill shortages 
D)  Because there may be an under-provision of training otherwise. 
A)  Because governments are more efficient in the providing such training 
B)  Because employers cannot afford to train workers 
C)  Because there are skill shortages 
D)  Because there may be an under-provision of training otherwise.

Question 5

The positive relationship between earnings and job tenure results from

Accepted Answer

A)  The fact that productivity is higher the longer an individual remains with the firm 
B)  Is simply a proxy for experience 
C)  Only reflects the fact that less productive workers leave 
D)  Only reflects the fact that more productive workers leave. 
A)  The fact that productivity is higher the longer an individual remains with the firm 
B)  Is simply a proxy for experience 
C)  Only reflects the fact that less productive workers leave 
D)  Only reflects the fact that more productive workers leave.

Question 6

Employers make use of screening devices because

Accepted Answer

A)  There is no relationship between education and productivity 
B)  This is the cheapest method of selecting the best candidates 
C)  Employing more educated workers will require a lower investment in training 
D)  None of these reasons. 
A)  There is no relationship between education and productivity 
B)  This is the cheapest method of selecting the best candidates 
C)  Employing more educated workers will require a lower investment in training 
D)  None of these reasons.

Question 7

The sheepskin model

Accepted Answer

A)  Suggests that returns are significantly higher in years in which qualifications are obtained 
B)  Is consistent with linear returns to education 
C)  Is inconsistent with credentialism 
D)  Suggests that the Mincer model underestimates the return to education. 
A)  Suggests that returns are significantly higher in years in which qualifications are obtained 
B)  Is consistent with linear returns to education 
C)  Is inconsistent with credentialism 
D)  Suggests that the Mincer model underestimates the return to education.

Question 8

The costs of general and specific training may be shared because

Accepted Answer

A)  General and specific training are complements 
B)  There are transactions costs 
C)  There are information asymmetries 
D)  Of all of these reasons. 
A)  General and specific training are complements 
B)  There are transactions costs 
C)  There are information asymmetries 
D)  Of all of these reasons.

The earnings function is endogenous because

The incentive to train is a function of

The Mincer human capital model uses years of schooling because

Governments may intervene in the provision of training

The positive relationship between earnings and job tenure results from

Employers make use of screening devices because

The sheepskin model

The costs of general and specific training may be shared because

Labour Force Participation

The Labour Supply Curve

The Demand for Labour; Changing Jobs: The Economics of Job Search

Extensions of Labour Demand: Mismatches in the Labour Market

Trade Unions

Bargaining and Conflict

The Structure of Labour Markets

Wage Incentives

Labour Market Policy

Filters

Exam 3: Investment in Human Capital

The earnings function is endogenous because

The incentive to train is a function of

The Mincer human capital model uses years of schooling because

Governments may intervene in the provision of training

The positive relationship between earnings and job tenure results from

Employers make use of screening devices because

The sheepskin model

The costs of general and specific training may be shared because

Labour Force Participation

The Labour Supply Curve

The Demand for Labour; Changing Jobs: The Economics of Job Search

Extensions of Labour Demand: Mismatches in the Labour Market

Trade Unions

Bargaining and Conflict

The Structure of Labour Markets

Wage Incentives

Labour Market Policy

Filters