Question

Assume the same number of females and males in a labor force. If females are paid less in a profession than males, how would one be able to tell whether the primary cause is a difference in the willingness of males and females to enter the profession or if the primary cause is discrimination on the part of employers?

a) If the cause were a difference in willingness, the equilibrium quantity of females hired would be greater than males.
b) If the cause were discrimination, the marginal revenue product of females would be lower than if the cause were a difference in willingness
c) If the cause were discrimination, the equilibrium quantity of females hired would be greater than males.
d) In either case, the equilibrium quantity would be the same; it is the wage that differs.

Answer 1

The earnings gap between females and males in a profession could be due to a difference in willingness to enter the profession or employer discrimination. Discrimination would affect the demand curve, reflecting a belief in lower productivity of women. The correct answer to whether the gap is caused by discrimination is b.

Step-by-step explanation:

When considering whether an earnings gap in a profession is due to a difference in the willingness of males and females to enter the profession or due to discrimination by employers, analysis of equilibrium quantities and marginal revenue product (MRP) is essential. If the primary cause were a difference in willingness to enter the profession, the supply curve would likely shift, leading to a change in the equilibrium quantity of females hired. However, if discrimination were the cause, we would expect the demand curve, which is indicative of the MRP, to differ for women; this discrimination could manifest as statistical discrimination, where employers assume women have lower productivity due to caregiving responsibilities, or as taste-based discrimination, which implies an irrational preference of employers.

To identify discrimination, we would need to demonstrate that women are paid less than men despite having similar levels of education, experience, and productivity. A more definitive proof of discrimination would require showing that the marginal revenue product of female employees is equal to that of male employees, yet there is a discrepancy in wages. Following these understandings, the correct answer to the question posed by the student is b) If the cause were discrimination, the marginal revenue product of females would be lower than if the cause were a difference in willingness.