Suppose that employers engage in statistical discrimination based on the information that,on average,women cost more to employ than men for various reasons.As a result,employers pay women less,on average,than they pay men.Assuming that the information is correct,what would be an effect of the law that requires employers to pay the same wage as men for the same job?

Question

Quizplus · Accepted Answer

Given that employers are acting on statistical discrimination due to higher costs associated with employing women, a law mandating equal pay for equal work would likely lead to fewer women being employed. Employers might perceive the cost of employing women to be higher than men when they can't adjust wages according to perceived costs, leading them to hire fewer women.

Suppose That Employers Engage in Statistical Discrimination Based on the Information