Microeconomics · free preview
Human Capital and Wage Differences
Workers invest in skills, education pays a premium reflecting higher productivity and some signaling, some jobs pay differently because they are different, and measured gaps bundle ability, choice and discrimination.
1. Schooling as investment
Schooling as investment
2. Pay for what the job is
Pay for what the job is
3. Ability, discrimination and measurement
Ability, discrimination and measurement
4. What policy can hold
What policy can hold
5. The investment test
A one-year training program costs 20 thousand in fees and forgone earnings, and raises annual wages by 5 thousand forever after. At a discount factor of 0.9 per year, the wage stream's present value is 5 times 0.9 over 0.1, which is 45 thousand. Should the worker enroll?
6. Compensating differentials
Why do night-shift warehouse jobs pay more than identical day-shift work in the same warehouse?
7. The premium's present value
A certificate costs 8 thousand and raises annual wages by 2 thousand forever. Using a discount factor of 0.9, the stream is worth 2 times 0.9 over 0.1. Compute the present value of the gain in thousands, and write the number.
8. Schooling as investment
When is a one-year training program worth taking, in the human capital framework?
9. Why the night shift pays
Why do night-shift warehouse jobs pay more than identical day-shift work in the same warehouse?
10. The program's net present value
A training program costs 10 thousand dollars and raises wages by 3 thousand per year forever. Using a discount factor of 0.8, so the present value of the gains is 3 times 0.8 over 1 minus 0.8, compute the net present value in thousands, and write the number.
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