Labor Economics Assignment Example | Topics and Well Written Essays - 2500 words

Labor Economics - Assignment ExampleBeckers concept of assay based discrimination states that firms that do not employ minorities do bear the cost of discrimination in concert with the minorities themselves.Discriminating firms usually have a higher cost of operation since they bear the cost of discrimination. Beckers concept shows that minorities in such an environment usually work harder and are much productive and so would accept a lower wage. This means that the cost of production is lower hence the firms become to a greater extent than profitable. The clear-sighted firms however are at a higher cost as majority employees go to demand relatively higher wages and their productiveness is average. As a result more employees would be required to achieve acceptable productivity.Entry of a non shrill firm under a ageless return to scale means outgrowth in number of employee is directly proportional to productivity. A non discriminating firm that has a high specialization of m inorities would ideally have higher productivity per employees and therefore an increase in number of more productive employees would mean a subsequence increase in productivity and thus more profitability. This is beca uptake the wage bill is also lower than that of a discriminating firm.Entry of non discriminating firm under decreasing return of scale DRTS would lead to constant production and decreased operating expense cost. Also since increase in work force does not adequately increase the production. The cost of having more employees is drastically reduced and since the minority workers produce maximally the cost of the wage bill remains relatively low and hence the firm becomes more profitable. In such a firm it would lead to more efficiency as the production process require less man power for efficiency and use of minority who are efficient and extremely productive would lead to the most desired state of profitability.3. infer that men earn on average