Reference no: EM1336096

Economics

Suppose an employer offers a base wage of $20 per hour for the first forty hours of a work each week and overtime pay of $30 per hour for any hours beyond forty per week; the employer allows workers to choose their own hours of work. Suppose employee A chooses to work thirty-six hours per week and employee B chooses to work forty-two hours per week. Compute the average weekly earnings for employees A and B, and compute the "earning gap" (in percentage terms) between them. In your view, does this observed earnings gap constitute discrimination? Justify conclusion.

A recent British study found that married mean earned more than unmarried men---but only if their wives did not have full-paid employment. Suggest an explanation for this finding. (Hint: In which case is a man more likely to share in the household responsibilities, including child care?)

Women who own their own businesses earn net profits that are only half as large as the net profits earned by men who own their own businesses. First, consider why women would be willing to accept lower profits. Could this reflect poorer options for women as employees? Alternatively, could it reflect other attributes of self-employment that women might fing more advantageous than do men? Then think about why women do earn lower profits. Is this evidence of discrimination? If so, by whom? If not, what else might account for the lower profits?

Why do you think we have laws that prohibit discrimination in pay based on sex or race but permit employers to discriminate in pay based on education or experience?