Income and Substitution Effects in Labor Economics: Difference between revisions

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==Gender Differences==
Men and women are observed to react in a different way to changes in wages. For men, substitution and income effects offset each other, while for women, substitution effect outweighs the income effect. In general though, we assume that substitution effect dominates the economic behavior of people. In this project, we are going to analyze the causes, effects and consequences of this generalization.


==Sex based Wage Inequality==
''Man is so made that he can only find relaxation from one kind of labor by taking up another.''
We consider wage inequality as one of the biggest problems in labor economics. This is why we decided to focus our attention on the wage differential, i.e. why women receive less money for the same quantity and quality of labor. The gap between men and women's payment tends to decrease worldwide, especially in the US, but we fell that this trend deserves serious consideration and analysis.
For our analysis of the issue, we are using the work of Francine Blau, Feminist Economics Today by Marianne Ferber and Julie Nelson, and the research of Mark Rosenzweig.


==Opportunity Cost of Leisure Time==
Anatole France, The Crime of Sylvestre Bonnard
One of the main factors that plays a role when analyzing the income and substitution effects is the opportunity cost of leisure time. The importance that a laborer places on leisure time when compared with the want to increase one's income will play the role in determining, which effect will dominate. If there is greater importance on leisure time, than increased income, the income effect will dominate. If their is greater importance on income than leisure time, substitution effect will dominate.
 
French novelist (1844 - 1924)
 
''I like work: it fascinates me. I can sit and look at it for hours.''
 
Jerome K. Jerome, "Three Men in a Boat", 1889
 
British humor writer (1859 - 1927)<center>[[Image:Grad.gif|thumb|Description]] </center>       
 
<center>'''Authors:'''</center>
 
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<center>''Gencheva, Eva'' </center>
<center>''Ross, Benjamin'' </center>

Latest revision as of 07:54, 4 May 2006

Page Overview | Income and Substitution Effects | Female vs Male Behavior in the Labor Market | Opportunity Cost of Leisure Time | Works Used

Man is so made that he can only find relaxation from one kind of labor by taking up another.

Anatole France, The Crime of Sylvestre Bonnard

French novelist (1844 - 1924)

I like work: it fascinates me. I can sit and look at it for hours.

Jerome K. Jerome, "Three Men in a Boat", 1889

British humor writer (1859 - 1927)

Description
Authors:
Anastasov, Milen
Gencheva, Eva
Ross, Benjamin
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