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ECON 4074: Labor Economics Spring 2012 Prof. Suqin Ge: Homework Assignment 2

This document provides information about an economics course assignment. It includes 3 questions about labor force participation rates in the US from 1970-2010, critiquing Malthus' theory of population growth, and a retirement choice problem. Students must submit typed answers to these questions by February 14th for the ECON 4074: Labor Economics course taught by Prof. Suqin Ge. Late assignments will not be accepted.

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37 views1 page

ECON 4074: Labor Economics Spring 2012 Prof. Suqin Ge: Homework Assignment 2

This document provides information about an economics course assignment. It includes 3 questions about labor force participation rates in the US from 1970-2010, critiquing Malthus' theory of population growth, and a retirement choice problem. Students must submit typed answers to these questions by February 14th for the ECON 4074: Labor Economics course taught by Prof. Suqin Ge. Late assignments will not be accepted.

Uploaded by

briangroves
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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ECON 4074: Labor Economics Spring 2012 Prof.

Suqin Ge

Homework Assignment 2
Due on February 14, Tuesday Q1 (40 point) Consider data from the 2010 U.S. Statistical Abstract, which can be found in Assignment2-data.xls (a) What has been the general trend in the labor force participation rate of married males since 1970? Consider four age groups: 1619, 20-44, 45-64, and 65+. For each group, how has their labor force participation rate changed over this time period? Why? (b) What has been the general trend in the labor force participation rate of married females since 1970? Consider four age groups: 1619, 2044, 4464, and 65+. How has the female labor force participation rate changed over this time period for each of these groups? Do the changes for women mirror the changes for men? Why?

Q2. (20 points) Why was Malthus wrong in predicting that families would have more children as income increased?
Q3. (20 points) A 60 year-old worker has two choices. He can work five more years, earning $50,000 per year and then retire at age 65 and collect $12,000 in retirement benefits each year for the next 15 years; or he can retire at age 60 and collect $X in retirement benefits each year for the next 20 years. (Assume throughout the problem that a dollar received today has the same value as a dollar received at any time in the future.) (a) What value of X gives the worker the same total income in the two options? (b) What value of X gives the workers the same total retirement benefits between the two options? (c) Suppose anyone aged 65 or older receives state-provided medical insurance for free. The worker also has access to the same medical plan for free as long as he continues to work. If he is under 65 years old and does not work, however, he can purchase similar health insurance for $6,000 each year. If he values retiring at age 60 over age 65 at $200,000, for what values of X should he retire at age 60? Q5. (20 points) Write a short summary on the two articles from The Economist on fertility. Note: data and articles can be downloaded from "Resources" in Scholar.

Note: Homework assignments must be submitted at the beginning of the lecture on the due date. Late submissions will NOT be accepted. You are encouraged to type your homework. Graphs and numerical calculations need not be typed, but must be neat and legible. If youre handing in several sheets of answers, staple them.

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