文档介绍：Earnings and Discrimination
Chapter 19
Differences in Earnings in the . Today
The typical physician earns about $200,000 a year.
The typical police officer earns about $50,000 a year.
The typical farm worker earns about $20,000 a year.
What causes earnings to vary so much?
Wages are governed by labor supply and labor demand.
Labor demand reflects the marginal productivity of labor.
What causes earnings to vary so much?
In equilibrium, each worker is paid the value of his or her marginal contribution to the economy’s production of goods and services.
Some Determinants of Equilibrium Wages
Compensating differentials
Human capital
Ability, effort, and chance
Signaling
The superstar phenomenon
Compensating Differentials
Compensating differentials refer to differences in wages that arises from ary characteristics of different jobs.
Coal miners are paid more than others with similar levels of education.
Night shift workers are paid more than day shift workers.
Professors are paid less than lawyers and doctors.
Human Capital
Human capital is the accumulation of investments in people.
The most important type of human capital is education.
Human Capital
Education represents an expenditure of resources at one point in time to raise productivity in the future.
College graduates in the . earn about 65 percent more than workers with a high school diploma.
Average Annual earnings by Educational Attainment
Why has the gap in earnings between skilled and unskilled workers risen in recent years?
International trade has altered the relative demand for skilled and unskilled labor.
Changes in technology have altered the relative demand for skilled and unskilled labor.