Deck 8: Labor Mobility

Question 1

If the supply of unskilled domestic labor and the supply of unskilled immigrant labor are both perfectly inelastic, then the immigration surplus to the domestic economy can be estimated by:

A)The number of immigrants times the new wage rate.
B)The total number of workers under immigration times the difference in the old and new wage rates.
C)One half of the number of immigrants times the new wage rate.
D)One half of the number of immigrants times the difference in the old and new wage rates.
E)National income minus government spending on immigration programs.

Answer 1

D

Question 2

Which statement is true?

A)The rate of job loss is unrelated to education.
B)The rate of job loss is highest for the least educated.
C)The rate of job loss is highest for the most educated.
D)The rate of job growth always exceeds the rate of job loss.
E)The rate of job growth always equals the rate of job loss.

Answer 2

B

Question 3

State University wishes to hire another labor economist.It targets two economists, Amy and Beth, who are both currently working at a university in another state and who are both earning $68,000 per year.Amy is a 32 year-old, single assistant professor who lived in India and Germany as a child and who will come up for tenure in 2 years.Beth is a 50 year-old, married full professor with tenure who has worked for a single university for 22 years.The offer to either economist is for $75,000 per year and the ability to apply for tenure in 3 years.Given the information above, Amy is more likely to accept a job offer from State University than is Beth for several reasons.Which is the least likely reason why?

A)Because Amy is younger than Beth.
B)Because Amy is not yet tenured.
C)Because Amy faces lower moving costs.
D)Because Amy is single while Beth is married.
E)Because both women stand to earn $7,000 more per year by switching jobs.

Answer 3

E

Question 4

Which of the following is least likely to affect the net gain to migration?

A)An improvement in economic opportunities in the destination state.
B)An improvement in economic opportunities in the source state.
C)An increase in migration costs.
D)Changing one's preferences for living in different places.
E)Government spending.

Question 5

The Roy model concerns

A)the skill-selection associated with immigration flows.
B)specific on-the-job training.
C)general training.
D)the age-earnings profile.
E)the cost-benefit analysis of layoffs or quits.

Question 6

The distribution of skills is the same in Low Rock as it is in High Rock.The return to each unit of skill is the same in Low Rock, regardless of how much skill one has.The returns to skill in High Rock, however, depend on one's skill level.Workers at the low end of the skill distribution in High Rock receive very little return on their skills (less than they would receive in Low Rock), while workers at the high end of the skill distribution in High Rock receive a very high return on their skills (more than they would receive in Low Rock).Assuming that people are free to migrate from Low Rock to High Rock but not the other way around, the Roy model predicts which of the following outcomes?

A)The average skill level in Low Rock will increase, while the average skill level in High Rock will decrease.
B)The average skill level in Low Rock will decrease, while the average skill level in High Rock will increase.
C)The average skill level in Low Rock will remain unchanged, but the average skill level in High Rock will increase.
D)The average skill level will increase in both locations.
E)The average skill level will decrease in both locations.

Question 7

In a standard Roy model, migration can lead to an increase in average skills in both locations.What is necessary for this to happen?

A)The workers who migrate from the source country are below-average in skill relative to the average source country person but are above-average in skill relative to the average destination country person.
B)The workers who migrate from the source country are above-average in skill relative to the average source country person but are below-average in skill relative to the average destination country person.
C)The highest skilled workers migrate from the source country to the destination country.
D)The lowest skilled workers migrate from the source country to the destination country.
E)Migration leads to an increase in average skills in both locations whenever there is positive selection.

Question 8

If the supply of unskilled domestic labor and the supply of unskilled immigrant labor are both perfectly inelastic, then the typical market equilibrium will be such that:

A)Immigrant labor will replace domestic labor.
B)The perfectly inelastic supply of unskilled domestic labor will prevent the hiring of any unskilled immigrant labor.
C)The post-immigration equilibrium will be associated with lower wages being paid to the unskilled immigrants compared to the wages paid to unskilled domestic labor.
D)Wages paid to unskilled domestic labor will be less under immigration than under no immigration.
E)Labor demand will shift out with increased immigration.

Question 9

Which of the following is a sign of a well-functioning labor market?

A)A high degree of labor mobility (job losses and job gains).
B)A constant unemployment rate.
C)Equal pay for all workers.
D)Equal pay in all regions.
E)All workers have a college education.

Question 10

Which of the following statements is associated with the standard migration model?

A)Return migration signals that the mover regrets having made the initial move.
B)Repeat migration signals that the mover regrets having made the initial move.
C)Repeat migration signals that the mover is moving for job-related reasons.
D)The decision to move is expected to increase the household's overall utility.
E)Moving for job reasons is done at the expense of family desires.

Question 11

Suppose there is currently positive selection of immigrants to the United States.What would happen to immigration to the U.S.if the return to skills were to fall in the United States?

A)The same selection of immigrants would continue to come to the United States.
B)The selection of immigrants to the United States would switch from being positive to being negative.
C)The selection would remain positive but with more workers immigrating to the United States.
D)The selection would remain positive, but the average skills of immigrants would fall.
E)The selection would remain positive, but the average skills of immigrants would increase.

Question 12

Assuming labor demand is downward sloping and that the labor market is competitive, what happens to national income as a result in immigration?

A)National income increases by more than the total earnings of immigrants.
B)National income increases by less than the total earnings of immigrants.
C)National income decreases by more than the total earnings of immigrants.
D)National income decreases by less than the total earnings of immigrants.
E)Immigrants have no effect on national income because they are not citizens.

Question 13

If a two-person household moves from Miami to Atlanta, which of the following can describe the household?

A)Both members of the households are tied movers.
B)One member of the household is a tied stayer.
C)One member of the household is a tied mover while the other is a tied stayer.
D)Neither member of the household is a tied mover.
E)Neither member of the household is a tied stayer.

Question 14

Which of the following is not likely to prevent some people from migrating?

A)Some people face high financial costs associated with migrating.
B)Some people don't want to leave their family and friends.
C)Having a spouse who has a very well-paying job in the current location.
D)Having a lucrative job offer in a different city.
E)Having a teenage child who does not want to change high schools.

Question 15

Which of the following statements about migration is not true?

A)Migration is greater among younger workers compared to older workers, because older workers have a shorter period in which to benefit from the returns to migration.
B)Migration is greater among highly educated workers compared to less educated workers, because the returns to education for highly-educated workers vary much more from location to location than for workers with low levels of education.
C)Migration is greater among married couples compared to single-person households, because migration costs are less for married couples.
D)A tied-stayer is someone who would move if he or she were single.
E)Migration is greater among people who like the adventure of moving compared to people who do not like the adventure of moving, because the psychic costs of moving are less for those who enjoy moving.

Question 16

Which is not a factor that generates return and/or repeat migration flows?

A)A worker realizes after the move that he or she miscalculated labor market opportunities in the new location.
B)A worker realizes after the move that he or she does not like the weather in the new location.
C)A worker moved initially in order to move up the career ladder in his or her company.
D)A worker lands a job after the move that pays him or her a wage much greater than originally expected.
E)A worker realizes after the move that the monetary and psychic costs of moving are not as large as he or she originally calculated.

Question 17

Suppose the age-wage profile of immigrants has been increasing over time.That is, the age-wage profile of immigrants in the 1990s is higher than the age-wage profile of immigrants in the 1980s, which is in turn higher than the wage-age profile of immigrants in the 1970s.In this case, if one uses cohort analysis to estimate the age-wage profile of immigrants, which of the following is possible to find:

A)A negative return to moving costs.
B)A horizontal age-wage profile.
C)A positively skewed wage distribution.
D)A negatively skewed wage distribution.
E)Negatively selected immigration.

Question 18

What is a likely explanation as to why workers who have been on the job for a long time earn more than newly hired workers?

A)Because workers in bad job matches tend to stay on the job longer.
B)Because workers in long-lasting job matches accumulate specific training over time, which increases the workers' productivity.
C)Because the positive effects of general training on education erode over time.
D)Young workers are more productive than older workers.
E)U.S.law requires older workers to be paid more than younger workers.

Question 19

The human capital externality refers to

A)an additional tax placed on institutions of higher learning.
B)the government's subsidization of institutions of higher learning.
C)the quality of the environment in which a child is raised.
D)the cohort affect from selection bias.
E)the environmental costs associated with rapid population growth.

Question 20

Negative selection in a migration model means that

A)immigrants from the source country are highly skilled relative to labor in the destination country.
B)immigrants from the source country are not highly skilled relative to labor in the destination country.
C)all workers in the source country would earn a higher return on their skills if they would remain in the source country.
D)all workers in the source country would earn a higher return on their skills if they would not immigrate to the destination country.
E)anyone in the source country who can afford the cost of migrating to the destination country will do so.

Question 21

Which one of the following statements regarding job turnover is false for the U.S.labor market?

A)The quit rate is almost always higher than the layoff rate.
B)The overall separation rate is much higher for younger workers than older workers.
C)The rate of job loss is highest for the least educated.
D)Workers who have a lot of seniority are likely to switch to a different firm when their wage-age profile begins to flatten out.
E)Men are much more likely to hold a long term job than are women.

Question 22

Specific job training

A)allows for more inter-industry job mobility.
B)raises entry level wages for the untrained.
C)leads to lower turnover.
D)discourages workers from earning seniority.
E)leads to a greater willingness by firms to lay off workers.

Question 23

Suppose an economy exhibits general conditions of downward sloping labor demand, upward sloping supplies of domestic and immigrant labor, and a competitive labor market.Which of the following is not a likely outcome of immigration?

A)Domestic workers will experience some job losses.
B)Domestic workers who keep their job will experience an increase in earnings.
C)The market clearing wage will fall.
D)Economic surplus will increase in the destination country, even net of immigrant earnings.
E)Some economic surplus will transfer from domestic workers to domestic firms.

Question 24

When a firm pays higher wages, it is likely that doing so will

A)increase turnover.
B)lower the firm's ability to attract high-skill workers.
C)encourage workers to stay on the job for a long time.
D)decrease worker utility.
E)decrease the quality of the potential worker pool.

Question 25

The standard model of geographic migration suggests:

A)Migration occurs when there is a good chance that a worker will gain back his costs of moving.
B)Increases in migration costs reduces the gains to migration.
C)Improvements in economic opportunities in the current region of residence discourage migration.
D)Improvements in economic opportunities in a possible region of residence encourage migration.
E)All of the above statements are true.

Question 26

A couple is considering moving to Tampa from Chicago.The cost of moving for Crystal is $300 while the cost of moving for Amelia is $600.Crystal earns $500 in Chicago and $550 in Tampa.Amelia earns $200 in Chicago and $1000 in Tampa.Will they move as a couple?

A)Yes, because they would earn $1,550 in Tampa but only $700 in Chicago.
B)Yes, because they receive a net gain of $150 by moving to Tampa.
C)Yes, because the joint cost of moving ($900) exceed what they could earn in Chicago ($700).
D)No, because they would lose $50 by moving to Tampa when all benefits and costs are taken into account.
E)No, because neither person would choose to move to Tampa on their own.

Question 27

Compared to older workers with several years of experience with one firm, newly hired young workers typically

A)have higher turnover.
B)have more on-the-job training.
C)have more experience.
D)are likely to stay with their job longer.
E)tend to earn more than their experienced colleagues.

Question 28

Which of the following statements about self-selection and immigration flows into the United States is false?

A)If the flow of immigrants is currently positively selected, increasing the costs to immigration will likely make the future flow of immigrants even more positively selected.
B)Negative selection results in low skilled workers coming to the United States.
C)High-skilled workers in foreign countries will not always choose to migrate to the United States.
D)Negative selection occurs when the United States offers a greater return to skill at high skill levels than the source country.
E)Positive selection results in highly skilled workers coming to the United States.

Question 29

Which of the following regarding internal migration in the United States is not true?

A)Migration is more common among younger workers compared to older workers.
B)Migration is more common among educated workers compared to uneducated workers.
C)Migration equalizes wages across regions.
D)Empirically the mystery is why there is not more internal migration, not why there is not less.
E)Repeat and return migration are rational decisions and routinely occur.

Question 30

Which of the following is true?

A)A person might choose to not move because their family is better off by not moving, even though the person would individually be better off by moving.
B)A family will move even though as a unit they are better off staying, as long as at least one member of the family is made better off by moving.
C)When a family migrates, there may be both tied movers and tied stayers in the family.
D)A repeat mover must have made a mistake in the initial move.
E)Cultural assimilation is not included in migration costs.