Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question: Suppose there are two cities, SYD and Berryville. These two cities have potentially different earning profiles, which charaterize the local relationship between earning and

Question: Suppose there are two cities, SYD and Berryville. These two cities have potentially different earning profiles, which charaterize the local relationship between earning and education. Let y denote earning and s denote years of schooling, which proxies education. s ranges from 1 to 25. Consider the following statements about the self-selection of the migration flow. Which of the following statements is correct?

(a) Suppose in both cities, the earning profile is y = 3 + 2s. Then, the migrant flow from Berryville to SYD is positively selected with respect to skills.

(b) Suppose in city SYD, the earning profile is y = 10 + 6s; in city Berryville, the earning profile is y = 20 + 5s. Then, the migrant flow from Berryville to SYD is negatively selected with respect to skills.

(c) Suppose in city SYD, the earning profile is y = 50 + s + s 2 ; in city Berryville, the earning profile is y = 20 + s 2 . Then, the migrant flow from Berryville to SYD is negatively selected with respect to skills.

(d) Suppose in city SYD, the earning profile is y = 2 + s; in city Berryville, the earning profile is y = 10 + 2 s. Then, the migrant flow from SYD to Berryville is positively selected with respect to skills.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions