Question 1

"Any worker for whom the present value of lifetime earnings will increase by migration will choose to move." This statement is:
A)true
B)false; migration depends on undiscounted earnings gains
C)false; there may be psychic costs of moving that deter migration
D)false; empirical evidence indicates that migration decisions have little to do with financial gains or losses

Accepted Answer

Migration decisions are not solely based on the present value of lifetime earnings. Psychic costs, such as leaving family, friends, and familiar surroundings, can deter individuals from moving even if the financial incentives are strong.

Question 2

All else equal,a worker is less likely to move:
A)the smaller the wage differential between the destination and the origin
B)the lower the discount rate
C)the greater the number of years one expects to remain in the new location
D)the lower the indirect costs of migrating

Accepted Answer

A smaller wage differential between the destination and the origin means the financial incentive to move is lower, making a worker less likely to relocate.

Question 3

In the equation for the net present value of migration,,the term "E₂" refers to: $$V _ { p } = \sum _ { n = 1 } ^ { N } \frac { E _ { 2 } - E _ { 1 } } { ( 1 + i ) ^ { n } } - \sum _ { n = 1 } ^ { N } \frac { C } { ( 1 + i ) ^ { n } } - Z$$ A)the net psychic costs of moving B)the length of time expected on the new job C)earnings from the new job D)earnings from the old job

Accepted Answer

Earnings from the new job

Question 4

The expected private rate of return to migration to a particular individual:
A)is similar to that on other forms of investment in human capital
B)equals that individual's actual rate of return
C)cannot be determined because there are backflows in migration
D)cannot be determined because there are earnings disparities between the origin and the destination

Accepted Answer

The expected private rate of return to migration to a particular individual is similar to that on other forms of investment in human capital. It is based on factors like the cost of migrating, the expected income differential between the origin and destination, the expected duration of migration, and the expected likelihood of success in the destination country. It can be calculated by comparing the lifetime earnings of the individual with and without migration, and adjusting for the cost and risk of migration. The concept of private rate of return refers to the individual's perspective and is based on their personal circumstances and goals. It may differ from the social rate of return or the overall impact of migration on the origin and destination countries.

Question 5

All else equal,a worker is less likely to move:
A)if the worker has moved before
B)the greater the amount of specific training the worker has
C)the greater the worker's educational attainment
D)the shorter the distance moved

Accepted Answer

The greater the amount of specific training a worker has, the less likely they are to move as it may be difficult to find a job that requires the same level of training in a new location.

Question 6

Linda quit her job as a loan officer at First Detroit State Bank to accept a similar position at First Minneapolis Savings Bank.This is an example of:
A)geographic mobility
B)occupational mobility
C)horizontal mobility
D)vertical mobility

Accepted Answer

The answer of Linda quit her job as a loan...

Question 7

The average economic rate of return to migration is estimated to be:
A)negative
B)less than 5%
C)between 10% and 15%
D)greater than 20%

Accepted Answer

The average economic rate of return to migration is estimated to be between 10% and 15%, which is closest to option C. Option A is incorrect because a negative economic rate of return would mean that migration has a detrimental effect on the economy. Option B is too low as it suggests that migration has little economic impact. Option D is too high and unlikely to be true for the average rate of return. Therefore, the best choice is C.

Question 8

In the equation for the net present value of migration,,the term "C" refers to: $$V _ { p } = \sum _ { n = 1 } ^ { N } \frac { E _ { 2 } - E _ { 1 } } { ( 1 + i ) ^ { n } } - \sum _ { n = 1 } ^ { N } \frac { C } { ( 1 + i ) ^ { n } } - Z$$
A)the net psychic costs of moving
B)the direct and indirect monetary costs of moving
C)earnings from the new job
D)the discount rate

Accepted Answer

In the given equation, "C" refers to the direct and indirect monetary costs of moving. This includes expenses like transportation, moving costs, and any other expenses incurred during the migration process. The net present value of migration is calculated by subtracting the present value of these costs from the present value of expected earnings in the new location over a given period of time.

Question 9

Because migration typically involves present sacrifice in order to obtain a greater stream of future earnings,many economists consider migration to be:
A)an investment in human capital
B)undertaken only by those who have very low discount rates
C)motivated strictly by monetary considerations
D)an impediment to economic efficiency

Accepted Answer

Migration involves a trade-off between present sacrifice and future earnings, which is similar to an investment. By moving to a new place, people are investing in their own human capital by acquiring new skills, knowledge or experience that can potentially lead to higher income in the future. Therefore, many economists consider migration as an investment in human capital.

Question 10

Which one of the following is a true statement?
A)Less than 3% of workers change occupations in a given year
B)Most individuals who change occupations in a given year are over 50 years old
C)Over 3 million employees are transferred by their employers each year
D)About 30% of geographic job-related moves are accompanied by a change in occupation

Accepted Answer

According to the text, "about 30% of geographic job-related moves are accompanied by a change in occupation." This makes statement D the only true statement among the options given.

Question 11

Sam left his job as an auto mechanic to accept a position in his local Sears store as an auto parts salesman.This is an example of:
A)geographic mobility
B)occupational mobility
C)horizontal mobility
D)vertical mobility

Accepted Answer

This is an example of occupational mobility as Sam switched from one occupation (auto mechanic) to another (auto parts salesman).

Question 12

Approximately what percent of the U.S.population changes residences each year?
A)Less than 5%
B)5% - 10%
C)15% - 20%
D)More than 25%

Accepted Answer

Approximately 15% - 20% of the U.S. population changes residences each year, based on data from the U.S. Census Bureau and other studies on residential mobility.

Question 13

All else equal,a worker is less likely to move:
A)if he or she has moved before
B)the more unionized the worker's occupation
C)the greater the worker's educational attainment
D)if the worker is single

Accepted Answer

Unionized occupations often offer better job security, benefits, and wages, which can reduce the incentive for a worker to move for employment opportunities.

Question 14

Older workers are less likely to migrate because older workers:
A)have typically accumulated more possessions,raising the direct cost of moving
B)are more likely to have to give up seniority and pension benefits
C)are more likely to have high psychic costs of moving
D)all of the above

Accepted Answer

Older workers are likely to have accumulated more possessions, making the direct cost of moving higher. They are also more likely to have seniority and pension benefits, making it more difficult to give up their current position. Additionally, they may have higher psychic costs of moving due to leaving behind familiar surroundings and social networks. Therefore, all of the options are true, making D the best answer.

Question 15

Which one of the following will tend to decrease the perceived costs of a move relative to the perceived benefits?
A)Renting,as opposed to owning,one's home
B)A higher unemployment rate in the destination
C)Larger family size
D)Increased federal grants and defense contracts in the origin

Accepted Answer

Renting, as opposed to owning, one's home will tend to decrease the perceived costs of a move relative to the perceived benefits. This is because the costs and risks associated with selling a home and buying a new one in a different location are avoided if one simply rents a home in the new location instead.

Question 16

Concerning the relationship between unemployment and migration,empirical studies generally find that:
A)families headed by unemployed persons are less likely than others to migrate
B)a higher rate of unemployment at the origin raises the likelihood of out-migration
C)a lower rate of unemployment at the destination positively affects immigration
D)there is no relationship between unemployment and the migration decision

Accepted Answer

Empirical studies generally find that higher unemployment rates in the origin area increase the likelihood of individuals migrating to seek better employment opportunities elsewhere.

Question 17

All else equal,a worker is more likely to move:
A)the smaller the wage differential between the destination and the origin
B)the greater the direct costs of moving
C)the larger the worker's family size
D)the lower the discount rate

Accepted Answer

A lower discount rate means the worker values future earnings more relative to current earnings, making the potential future income gains from moving more attractive. This increases the likelihood of moving for better job opportunities.

Question 18

Which one of the following helps to explain the observed relationship between age and mobility?
A)Older workers tend to have more specific human capital and on-the-job training
B)Older workers tend to have more general training
C)Younger workers have less time to recoup their investment costs
D)Both direct and psychic costs of moving tend to decrease with age.

Accepted Answer

Older workers often have more specific human capital and on-the-job training, which makes them more valuable to their current employers but potentially less mobile in the job market, as their specific skills may not be as easily transferable to new positions or industries.

Question 19

All else equal,a worker is more likely to move if:
A)his or her spouse is also a labor force participant
B)there are school-age children in the family
C)his or her spouse has accumulated very little job tenure
D)he or she is married

Accepted Answer

A worker is more likely to move if their spouse has accumulated very little job tenure, as it implies fewer ties to the current location and less disruption to the spouse's career.

Question 20

If an economics professor moves from the University of California at Berkeley to the University of Texas at Austin,that is an example of:
A)job change/no change in residence
B)occupational change/no change in residence
C)geographic change/no change in occupation
D)geographic change/change in occupation

Accepted Answer

The professor is changing their geographic location from Berkeley to Austin but remains in the same occupation (economics professor), hence it's a geographic change with no change in occupation.

Quiz 9: Mobility,Migration,and Efficiency

"Any worker for whom the present value of lifetime earnings will increase by migration will choose to move." This statement is:

All else equal,a worker is less likely to move:

In the equation for the net present value of migration,,the term "E₂" refers to: $V _ { p } = \sum _ { n = 1 } ^ { N } \frac { E _ { 2 } - E _ { 1 } } { ( 1 + i ) ^ { n } } - \sum _ { n = 1 } ^ { N } \frac { C } { ( 1 + i ) ^ { n } } - Z$

The expected private rate of return to migration to a particular individual:

All else equal,a worker is less likely to move:

Linda quit her job as a loan officer at First Detroit State Bank to accept a similar position at First Minneapolis Savings Bank.This is an example of:

The average economic rate of return to migration is estimated to be:

In the equation for the net present value of migration,,the term "C" refers to: $V _ { p } = \sum _ { n = 1 } ^ { N } \frac { E _ { 2 } - E _ { 1 } } { ( 1 + i ) ^ { n } } - \sum _ { n = 1 } ^ { N } \frac { C } { ( 1 + i ) ^ { n } } - Z$

Because migration typically involves present sacrifice in order to obtain a greater stream of future earnings,many economists consider migration to be:

Which one of the following is a true statement?

Sam left his job as an auto mechanic to accept a position in his local Sears store as an auto parts salesman.This is an example of:

Approximately what percent of the U.S.population changes residences each year?

All else equal,a worker is less likely to move:

Older workers are less likely to migrate because older workers:

Which one of the following will tend to decrease the perceived costs of a move relative to the perceived benefits?

Concerning the relationship between unemployment and migration,empirical studies generally find that:

All else equal,a worker is more likely to move:

Which one of the following helps to explain the observed relationship between age and mobility?

All else equal,a worker is more likely to move if:

If an economics professor moves from the University of California at Berkeley to the University of Texas at Austin,that is an example of: