Chapter 14 Labor Market Discrimination

Chap014 Labor Market discrimination
1. Discrimination that results in the payment of a lower wage to a woman relative to

an equally productive man on the same job is called wage discrimination.
2. Wage discrimination is Paying one group less than another, although they have the
same productive characteristics.
3. African American woman paid less than white man is Wage discrimination.
4. Discrimination that results in the payment of a lower wage rate to a female relative
to an equally productive male is termed Occupational discrimination.
5. Discrimination that segregates qualified women into lower-paying jobs is called
Occupational discrimination.
6. Which is occupational discrimination? 97% of all secretaries are women.
7. Discrimination in the form of access barriers to productivity-increasing
opportunities such as education and training is called human-capital
discrimination.
8. Statistical discrimination refers to making individual hiring decisions on the basis
of the characteristics of the group to which a person belongs, rather than on his or
her personal characteristics and productivity.
9. Statistical discrimination is The use of some observable characteristics by
employers as a screening device in the hiring process.
10.Statistical discrimination can persist in the long run if differences in average
characteristics among groups continue.
11.Insurance companies require male drivers under age 25 to pay higher insurance
rates than female drivers under age 25. Craig Raymond, however, is a safer driver
than the average female driver under age 25. Craig's higher insurance rate reflects
Statistical Discrimination.
12.Which of the following is an example of statistical discrimination? A firm hires a
man rather than a woman for a specific job because, on average, women have
higher rates of absenteeism than do men.
13.An employer is prejudiced, prefers to hire white rather than African-American
workers, and is willing to pay higher wages to obtain white workers. This
illustrates the taste-for-discrimination model.
14.An employer who is willing to pay a wage premium to avoid employing persons
from some particular group is engaging in A taste for discrimination.
15.An implication of the taste-for-discrimination model is that other things equal,
nondiscriminating firms will have lower production costs than discriminating
firms.
16.In the taste-for-discrimination model, competitive forces will tend to reduce
discrimination in the very long run.
17.In the taste-for-discrimination model, white employers behave as if employing
African-American workers adds to costs.
18.One implication of Becker's "taste-for-discrimination" model is that The existence
of competitive market forces will cause discrimination to diminish and eventually
disappear.
19.Becker's taste for discrimination an employer who is prejudice against African
Americans Will only hire African Americans if the wage differential exceeds his
discrimination coefficient.
20.Statistical discrimination and Becker's taste for discrimination, Differ in that the
former results in potential increased profits, firms with taste for discrimination will
have lower.
21.A particular employer's discrimination coefficient d measures the amount an
employer is willing to pay to hire a white rather than a African-American worker.
22.An employer whose discrimination coefficient is $2 will hire only whites if the
actual African-American-white wage differential is less than $2.
23.An employer whose discrimination coefficient is zero will randomly hire African-
American and white workers if the actual African-American-white wage
differential is also zero.
24.An employer whose discrimination coefficient is zero Does not discriminate
against women or minorities.
25.An employer whose discrimination coefficient approaches infinity Refuses to hire
any women or minorities regardless of the wage differential.
26.An increase in the collective discrimination coefficients of employers will reduce
the African-American wage rate, decrease African-American employment, and
lower the actual African-American-white wage ratio.
27.A reduction in the collective discrimination coefficients of employers will increase
the African-American wage rate, increase African-American employment, and
increase the actual African-American-white wage ratio.
28.Labor market discrimination creates a redistribution of a smaller domestic output.
29.Which one of the following non-discriminatory factors may account for lower
observed wages for women compared to men? Women have stronger preferences
for job safety.
30.Suppose that wages for African-American and white workers of equal productivity
are $12 and $13 an hour, respectively. If a particular firm hires only whites, its
discrimination coefficient must be greater than $1.
31.Assume that all workers are equally productive but the wage rate for men is $12
compared to $9 for women. An employer who employs only male workers must
have a discrimination coefficient of more than $3.
actual African-American-white wage differential is less than $2.
actual African-American-white wage differential is $3 an hour.
34.The Equal Pay Act of 1963 outlawed separate pay scales for men and women who
perform the same jobs.
35.A study finds that handsome people make more than ugly people in occupations
where workers interact with customers. This supports which of these models of
discrimination Customer.
36.Which of the following can NOT explain differences in earnings of men and
women? affirmative action.
37.Which of the following is an argument in support of affirmative action plans?
Something more than equal treatment is necessary for women and selected
minorities to overcome centuries of discrimination and occupational segregation.
38.Affirmative action plans were mandated under a series of Executive Orders in the
1960s.
True or False:
1. Institutional discrimination occurs when women or minorities are systematically
disadvantaged by the rules and incentives of organizations and institutions such as
firms, markets and the government. True
2. Discriminatory wage differentials due to employer prejudice will disappear in the
long run. uncertain. This statement is true assuming labor and product markets are
perfectly competitive. If there are imperfections in either market (e.g., monopoly or
monopsony), however, discriminatory wage differentials may persist in the long
run.

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Chap014 Labor Market discrimination

1. Discrimination that results in the payment of a lower wage to a woman relative to

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