Labour Economics: Checkpoint 1

Quick checkpoint - five questions on compensating differentials, efficiency wages, discrimination studies, job polarisation and employment protection.

Question 1 of 5 What are compensating wage differentials?

Bonuses paid for good performance Higher pay for risky or unpleasant jobs to attract workers Taxes on high earners Pay cuts during recessions

Adam Smith noted that unpleasant jobs must pay more when workers have choices.

Question 2 of 5 Why did Henry Ford introduce the five-dollar day in 1914?

Because the law required it To reduce very high turnover and improve productivity To reduce car prices To avoid taxes

Higher pay reduced quitting and absenteeism, an example of efficiency wages.

Question 3 of 5 How do correspondence studies measure hiring discrimination?

By asking employers if they discriminate By sending identical fake applications with different names and comparing callbacks By counting employees in each firm By reviewing tax records

Differences in callback rates for identical applications reveal discrimination.

Question 4 of 5 What is job polarisation?

Growth in high- and low-skill jobs with a decline in middle-skill routine jobs An increase in all jobs equally A shift of all jobs to cities Rising unemployment in every occupation

Routine middle-skill tasks were easiest to automate.

Question 5 of 5 What threshold did India's labour codes set for requiring government permission for layoffs?

10 workers 50 workers 300 workers 1,000 workers

The threshold rose from 100 to 300 workers, with states able to raise it further.

← Back to The Beveridge Curve: Jobs and Jobseekers Next lesson → India's Educated Youth Unemployment Puzzle

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