Question

Which of the following is an example of labor-market discrimination? You may assume that worker A and worker B have identical characteristics except for the ones listed. A firm offers a higher salary to worker A than worker B because worker A

a. has more experience.

b. is willing to travel two weeks out of each month, whereas worker B will not travel more than three nights a month.

c. has a special certification that directly relates to her job, whereas worker B does not.

d. is a young blonde woman, whereas worker B is an older, gray-haired man.

Answer 1

Labor market discrimination refers to the difference in wages paid to two individuals on basis of a characteristic that is unrelated to the job they have applied for.

Experience, qualification, and adhering to the nature of job are part of job and these characteristics can be used to differentiate between employees and paying them different wages.

However, wage difference on basis of age and physical appearance is not related to job and thus would be construed as labor market discrimination.

So,

The example of labor market discrimination is that a firm offers a higher salary to worker A than worker B because worker A is a young blonde woman, whereas worker B is an older, gray-haired man.

Hence, the correct answer is the option (d).