Wage Inequality among Vocational Secondary Graduates in Egypt

Exam rules:    ·       This is a take home exam. You are expected to submit your answers (via Blackboard) on December 13th – before 11:58 pm.    ·       If you have any inquiry you may only ask the course instructor via WhatsApp or email. You cannot communicate with your colleagues, the course TAs or any other person.    ·       Answer on this same exam file by adding space as much as you need following each questions. It is better to type in your answers (than hand writing them). Graphs may be sketched by hand, then scanned and added as picture in this same Word file.   ·       IMPORTANT: Write your name and ID at the top of your file. Also, before uploading your file on blackboard make sure to add your section, name and ID in the file name as follows: “Econ3071Sec..YourName Your ID”   ·       IMPORTANT: Whenever possible use graphs to explain your suggested models and arguments. It would also be a good idea to add quotes or results from your CBL or evidence from relevant readings to support your arguments.     ·       To help you organize your time, the expected length of your answer for each question are provided between brackets.   ·        This assignment is governed by AUC regulations on plagiarism and academic integrity, as described in the AUC Code of Academic Integrity at:  www.aucegypt.edu/resources/acadintegrity/.   ·       Please copy and paste the below AUC academic integrity pledge on the first page of your exam answer sheet and sign it:    “By submitting this exam, I affirm that I have followed AUC’s Code of Academic Ethics and the work submitted is my own. I have not consulted unauthorized resources or materials nor collaborated with other individuals unless allowed.”         Read the attached policy brief on:  “Wage Inequality among Vocational Secondary Graduates in Formal and Informal Urban Areas of Egypt”   You may also bring other relevant literature to elaborate your argument.    Answer all the following questions:    1.     The policy brief highlights that below secondary education is more prevalent among youth living in rural and informal areas, especially among young women. Based on your previous readings and your knowledge of labor economics theories, particularly the Human Capital Model, Explain the possible reasons behind this phenomenon. (1/2 to 1 page)   2.     Based on the results of the policy brief: “Vocational secondary graduates are more likely to end in informal and irregular jobs, particularly those living in informal areas of Egypt.”          i.         What would you call this type(s) of discrimination? Explain (1 paragraph)        ii.         Explain in detail what may be driving this type(s) of discrimination using Becker’s “taste-for-discrimination” model. (1/2 to 1 page)   3.     According to the results of the policy brief “There exists a large wage inequality against females, particularly in informal areas of Egypt…” Based on your previous readings and your knowledge of labor economics theories, do you think this disadvantage position of women in the labor market in Egypt is basically the result of rational choices made by women or discrimination? And Why? (1/2 to 1 page)   4.     If we assume that: (a) employers must pay higher wages to attract workers from wider geographic areas and hence higher wages are associated with longer commuting distances (less of the amenity “closeness of job to home”) and (b) females on the Egyptian labor market have greater tastes for having jobs close to their homes than males. Use the hedonic wage model to show graphically why a male-female wage differential might emerge, independently of skill differences or gender discrimination.  (1-2 paragraphs with graphs)

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