ECON3029 WORKSHEET November 1 – 6 2021.
Question 1 [20 marks]
A justification for job training programs is that they improve worker productivity. Suppose that
you are asked to evaluate whether more job training makes workers more productive. However,
ather than having data on individual workers you can access data on manufacturing firms in
Ohio. In particular, for each firm, you have information on hours of job training per worker
(training) and number of non-defective items produced per worker hour (output).
(a) Carefully state the ceteris paribus thought experiment underlying this policy question.
[5 marks]
(b) Does it seem likely that a firm decision to train its workers will be independent of worker
characteristics? [4 marks]
(c) List 3 measurable and unmeasurable worker characteristics? [6 marks]
(d) Name a factor other than worker characteristics that can affect workers’ productivity.
[1 marks]
(e) If you find a positive co
elation between output and training, would you convincingly
established that job training makes workers more productive? Explain [4 marks]
Question 2 [20 marks]
Examine the table below which contains some labour market data for the Bahamas (2009 – 2014) and
answer the questions which follow.
Select Labour Market Information for the Bahamas, XXXXXXXXXX
Sources:
1. Except the minimum wage, variables are created with data from Inter-American Development Bank. Labor
Markets Division XXXXXXXXXXDatabase of Labor Markets and Social Security Information System (SIMS). Washington,
DC: Inter-American Development Bank. Numbers for Development. Available from:
https:
mydata.iadb.org/d/v2c9-36h7
2. Minimum wage information is ascertained from:
Bahamas – Minimum wages. Available from: http:
www.countryeconomy.com/national-minimum-wage
ahamas
United Nations. (n.d.). Purchasing power parities (PPP) conversion factor, local cu
ency unit to international
Year Average monetary
labor income for
workers in their main
occupation in the last
month, PPP (constant
2011
international $)
Average monetary
labor income for
formal workers in
their main
occupation in the
last month, PPP
(constant
2011 international $)
Average monetary labor
income for informal workers
in their main occupation in
the last month, PPP
(constant
2011 international $)
Unemploymen
t Rate
Monthly Minimum
Wage, PPP (constant
2011
international $)
2009 2, XXXXXXXXXX, XXXXXXXXXX, XXXXXXXXXX% 770
2011 1, XXXXXXXXXX, XXXXXXXXXX, XXXXXXXXXX% 770
2012 1, XXXXXXXXXX% 770
2013 1, XXXXXXXXXX, XXXXXXXXXX, XXXXXXXXXX% 770
2014 1, XXXXXXXXXX, XXXXXXXXXX, XXXXXXXXXX% 770
https:
mydata.iadb.org/d/v2c9-36h7
http:
www.countryeconomy.com/national-minimum-wage
ahamas
ECON3029 WORKSHEET November 1 – 6 2021.
dollar. Millennium Development Goals Database. United Nations Statistics Division. Available from:
http:
data.un.org/Data.aspx?d=MDG&f=seriesRowID%3a699
(a) Given the theorized relationship between the unemployment rate and the minimum wage in the
static model of the labour market, how should the unemployment rate respond to a constant minimum
wage? [4 marks]
(b) How does this compare to the data shown in the table? Explain and support your reasons with
eferences in text and in the reference list according to APA conventions. [6 marks]
(c) Note that there is a difference in income depending on employment in the formal sector and that
these incomes are different from the minimum wage. Using the theory of compensating wage
differentials and other reasons, explain why wages might vary for workers in the formal sector versus
the informal sector. What can you conclude about the need for further research in this area?[10 marks]
Ru
ic Questions 1 & 2
Criteria Excellent Good Satisfactory Poor
Integration of
knowledge
& content
Answers are
comprehensive,
accurate and
complete. Key ideas
are clearly stated,
explained, and well
supported.
Answers are accurate
and complete. Key
points are stated and
supported.
Answers are not
comprehensive or
completely stated.
Key points are
addressed, but not
well supported.
Answers are partial
or incomplete. Key
points are not clear.
Question not
adequately answered.
Organization Well organized,
coherently developed,
and easy to follow
Organization is
mostly clear and easy
to follow.
Inadequate
organization or
development.
Structure of the
answer is not easy to
follow.
Organization and
structure detract from
the answer
Writing
Conventions
(Spelling,
punctuation,
grammar, and
complete sentences.)
Displays no e
ors in
spelling, punctuation,
grammar, and
sentence structure.
Displays one to three
e
ors in spelling,
punctuation,
grammar, and
sentence structure.
Displays three to five
e
ors in spelling,
punctuation,
grammar, and
sentence structure.
Displays over five
e
ors in spelling,
punctuation,
grammar, and
sentence structure.
Question 3 [20 marks]
Let us suppose that labour demand and labour supply are represented by the equations:
Demand: LD = XXXXXXXXXX5W XXXXXXXXXXSupply: LS = 0.5W.
a. Find the equili
ium wage and employment level. [7 marks]
. Graph