Suppose That, in an Attempt to Reduce Unemployment Among Unskilled

question 178

Essay

Suppose that, in an attempt to reduce unemployment among unskilled workers and in particular young workers, the government introduces a "training" wage that is below the minimum wage and that can be used to hire new, unskilled workers. This wage would be paid for a period of up to six months, at which time the wage would have to be increased to at least the minimum level. Explain how this would reduce unemployment. Do you think unskilled workers would favor such a policy?

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Definitions:

Empirical Economics

The branch of economics that focuses on using data and statistical methods to test hypotheses and build economic theories.

Statistical Techniques

Mathematical methods applied to analyze, interpret, and make inferences from data.

Positive Statement

An objective statement that can be tested, based on factual information and data, without any value judgments.

Industrial Society

A society characterized by a reliance on mechanized labor to create material goods, often associated with a significant shift from agricultural to industrial economies.