Question 1

Which of the following does not encapsulate the principles behind the theory of equalising differences?&#10;A) jobs where there is a high risk of failure will be paid more than those where there is a high chance of success&#10;B) workers will need a higher wage to perform dangerous work&#10;C) jobs that take longer to learn will offer a higher wage&#10;D) seasonally employed agricultural workers will receive a lower wage because of their part-time employment

Accepted Answer

The theory of equalising differences suggests that workers will be willing to accept different levels of pay based on differences in job characteristics such as risk, skill level, and unpleasant working conditions. Option D does not reflect this principle as it suggests that agricultural workers receive lower wages simply based on the fact that their job is seasonal and part-time, rather than due to any inherent differences in working conditions or required skills.

Question 2

The American Institutionalist School emphasises the existence of which feature of modern economies?&#10;A) managerial vacancies that are filled only by internal candidates&#10;B) large bureaucratic corporations with well-established administrative rules&#10;C) a constant level of trade union representation&#10;D) discrimination against minority groups

Accepted Answer

The American Institutionalist School emphasizes the existence of large bureaucratic corporations with well-established administrative rules in modern economies.

Question 3

According to Doeringer and Piore (1971), secondary sector jobs will exhibit which of the following traits?&#10;A) good promotion opportunities&#10;B) high staff turnover&#10;C) employment stability&#10;D) amenable working conditions

Accepted Answer

Secondary sector jobs, as described by Doeringer and Piore, are characterized by high staff turnover due to their typically lower wages, less job security, and poorer working conditions compared to primary sector jobs.

Question 4

According to Piore (1975), the upper tier of the primary sector is differentiated from the lower tier by which of the following aspects?&#10;A) higher staff turnover&#10;B) less career advancement opportunities&#10;C) more rigid administrative rules&#10;D) lower wages

Accepted Answer

Piore (1975) differentiates the upper tier of the primary sector by highlighting characteristics such as lower staff turnover, which contrasts with the higher staff turnover often found in the lower tier.

Question 5

The radical theory of segmentation emphasises the importance of which of the following?&#10;A) the persistence of discrimination as a driver of labour market segmentation&#10;B) the elimination of wage and employment competition between workers as these provide a dis-incentive to invest in on-the-job training&#10;C) the creation of segmented labour markets as a response to the desire to minimise training costs&#10;D) the creation of career ladders and rewards to firm tenure as a way of creating employment stability

Accepted Answer

The answer of The radical theory of segmentation emphasises the...

Question 6

The job competition model of Thurow (1970) emphasises which of the following as a reason for labour market segmentation?&#10;A) to reduce discrimination&#10;B) to reduce staff turnover&#10;C) to minimise training costs&#10;D) to establish formal rules for hiring and promotion

Accepted Answer

Thurow's job competition model suggests that employers may segment the labour market to minimize training costs. This is done by differentiating between positions that require different levels of skills, experience or training, and by offering lower wages for those positions that do not require much specialization or knowledge. By doing so, employers can reduce the risk of investing in employees who may leave for better-paying jobs.

Question 7

Empirically, labour market segmentation has not been based upon the identification of which of the following?&#10;A) When empirically identifying a priori occupational or industrial labour market segmentation, truncation bias results in which of the following?&#10;B) a low skill sector with no on-the-job training&#10;C) a high skill sector with limited employee mobility&#10;D) non-economic barriers between sectors preventing mobility

Accepted Answer

The answer of Empirically, labour market segmentation has not been...

Question 8

When empirically identifying a priori occupational or industrial labour market segmentation, truncation bias results in which of the following?&#10;A) naturally lower estimated returns to education in the secondary sector&#10;B) a natural equalisation of the estimated returns to education in primary and secondary sectors&#10;C) a clustering of observations in the secondary sector&#10;D) a natural reduction in the returns to human capital in the primary sector

Accepted Answer

Truncation bias in the context of labor market segmentation, particularly when empirically identifying a priori occupational or industrial segments, can lead to artificially lower estimated returns to education in the secondary sector. This is because truncation bias often results from the exclusion of certain observations from the analysis, which can disproportionately affect the estimated outcomes in segmented labor markets, especially in the secondary sector where lower wages and less stable employment conditions are more common.

Deck 8: The Structure of Labour Markets