Answer to Question #88312 in Microeconomics for Frazer Ariki

Question

The data below show real wage levels at various percentiles of the wage distribution for material-handling labourers in New Zealand.

Percentile 1975 1995

10th $4.26 $2.97

50th $6.02 $3.89

90th $10.44 $9.07

A. Calculate w90/w50, w50/w10, and w90/w10 percentile wage differentials for both years.

B. Describe the changes in wage inequality in this local market

C. Use the relative demand and supply model to explain the effect of increased immigrants into this labour market on relative wage and employment outcomes

Answer 1

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