Labor economics worker skills
Not what you're looking for?
4. Suppose that a worker's skills can be summarized by the number of efficiency units she owns and the distribution of efficiency units in the population such that worker 1 has one efficiency unit, worker 2 has 2 efficiency units, and so on. There are 100 workers in the population of the country of Vin. In deciding whether to move to the U.S., Vinians compare their weekly earnings in Vin (wv) and their potential earnings in the U.S. (ws). The relationship between wages and skills are
wv = 700 + 0.5e
ws = 670 + e
where e gives the number of efficiency units.
(a) Assuming no migration costs, what is the immigration rate of Vinians (i.e., the fraction of the total population that moves to the U.S.)?
(b) What is the average number of efficiency units among immigrants?
(c) Is the immigrant flow positively or negatively selected?
(d) Suppose that it costs $10 to migrate from Vin. Do any of your answers to (a)-(c) change?
Purchase this Solution
Solution Summary
The solution answers the question(s) below.
Solution Preview
(a) We solve for e by setting wv = ws
700 + 0.5e = 670 + e
Or e - 0.5e = 700 - 670
Or 0.5e = 30
Therefore, e = 30/0.5 = 60
Therefore, the ...
Purchase this Solution
Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.