Suppose that all workers have the same skill level and that, if they work for a whole year, the value of their marginal product to a competitive firm (net of training costs incurred by the firm) is $8,000 per month ($96,000 per year). If a worker quits halfway through the year, the above figure is reduced to $5,000 per month ($60,000 per year). Suppose that the historical midyear quit rate for men is 25% and for women 50%.

(a) Suppose that the employer (who has no taste for discrimination) has full knowledge of whether a worker will stay for the whole year or quit halfway. What monthly salaries will the firm offer to new employees? Will you ob- serve any salary difference that may be attributed to gender discrimination? Why or why not?

(b) Now suppose that the employer knows only the statistical averages of the quit rates by gender and has no private information about specific individuals. What monthly salary will the firm offer to (i) women and (ii) men? Will you observe any salary difference that might be attributed to gender dis- crimination? Why or why not?

(c) If in part b the firm is legally forbidden to offer different wage rates to women and men for the same job, what will the firm likely do?