Empirical work that does not correct wages for differences in productivity of workers is likely to:
A)find evidence of wage differentials
B)be unable to capture evidence of labour market discrimination
C)misinterpret apparent evidence of labour market discrimination
D)do all of the above

Question

Quizplus · Accepted Answer

Empirical work that does not adjust wages for differences in worker productivity may find evidence of wage differentials, potentially misinterpret these differentials as labor market discrimination, and thus fail to accurately capture evidence of labor market discrimination if it exists. This is because not accounting for productivity differences can confound the analysis, making it difficult to discern whether wage differences are due to discrimination or legitimate productivity differences.

Empirical Work That Does Not Correct Wages for Differences in Productivity