Practice mode Income Inequality

If labour market discrimination crowds women into a limited number of occupations, leaving more occupations open mainly to men, what will happen?

Correct answer B. Both the wages and the marginal productivity of men will be higher than they otherwise would be

Explanation

Under the crowding model, excluding women reduces the labour supply in men's occupations. With fewer workers there, each man's marginal product is higher, and so is the wage that reflects it.

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