Ability Bias Can Arise When Estimating Compensating Wage Differentials Associated

question 18

Multiple Choice

Ability bias can arise when estimating compensating wage differentials associated with various job characteristics. What is ability bias in this context?

• A) Low-skilled workers are likely to have low wages but good job amenities.
• B) High-skilled workers are likely to have high wages but poor job amenities.
• C) High-skilled workers are likely to have lower wages than unskilled workers but to have better job amenities.
• D) High-skilled workers are likely to have higher wages than unskilled workers but to have worse job amenities.
• E) High-skilled workers are likely to have higher wages than unskilled workers, but they are also likely to trade some of their higher wages for better job amenities.

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Definitions:

Nobel Prizes

A set of annual international awards bestowed in several categories by Swedish and Norwegian institutions in recognition of academic, cultural, or scientific advances.

Cross-Sectional Study

Research that compares people of different ages at the same point in time.

Different Age Groups

Categories of people classified based on their age, often considered in research, marketing, and planning to address specific needs, behaviors, or characteristics.

Retested

The process of administering a test or assessment for a second time to measure changes in performance or condition.