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

Quizplus · Accepted Answer

Cohort analysis looks at the wage profile of groups of individuals who were born in the same year and compares their wages over time. If the age-wage profile of immigrants has been increasing over time, then the cohort analysis may show a horizontal age-wage profile because individuals in each cohort are earning higher wages as they age. This means that there is not a significant difference in wage growth between different age groups within the same cohort. Option A is incorrect because a negative return to moving costs would indicate that individuals who move to a new country are worse off than if they had stayed in their home country. Option C and D are not necessarily true based on the information given. Finally, option E is unlikely because there is no indication that the immigration process is negatively selecting individuals based on their wages or other factors.

Suppose the Age-Wage Profile of Immigrants Has Been Increasing Over