Question

During the​ 1970s, many women changed their minds about whether they would leave the labour force after marrying and having children or whether they would be in the labour force most of their adult lives. In other​ words, many more women ended up being in the labour force than expected to be when they were of high school and university age.

What impact did this fact have on the earnings of these​ women? Briefly explain.

Had they known they would be in the labour​ force, then the earnings of these women would have been

A.

higher because they would have sought more training.

B.

higher because they would have entered the labour force at a younger age.

C.

lower because they would have sought to obtain less education.

D.

higher because they would have taken jobs where experience was less important.

E.

unchanged due to negative feedback loops

Answer 1

The correct answer is Option (A) Higher because they would have sought more training.

Explanation -

If the women in high school or university knew that they would end up in the labor force, they would pursue training or courses that enhanced their skills for higher level jobs than lower level jobs. Since these skills were not enhanced as these women were not aware, they ended up in relatively generic and lower paying jobs. Further, since the women unexpectedly ended up in the labor force, the supply of labor increased and this shifted the supply curve to the right. The impact was that wages trended lower for relatively generic jobs.