A Study by Price Fishback and Shawn Kantor of the University

question 146

Multiple Choice

A study by Price Fishback and Shawn Kantor of the University of Arizona shows that after the passage of workers' compensation laws, wages received by workers in the coal and lumber industries fell.
Source: Price V.Fishback and Shawn Everett Kantor, "Did Workers Pay for the Passage of Workers' Compensation Laws?" Quarterly Journal of Economics, Vol.100, No.3, August 1995, pp.713-742.
Which of the following could explain why passage of workers' compensation laws led to a fall in wages in some industries?

• A)The passage of the workers' compensation laws made it more expensive for firms to employ workers, thus reducing the demand for workers.
• B)The passage of the workers' compensation laws allowed employers in hazardous industries to reduce compensating differentials which, in turn, reduce wages.
• C)Employers reduced wages to partially offset the cost of having to purchase insurance that would compensate workers for injuries suffered on the job.
• D)The supply of labor in these hazardous industries increased following the passage of the workers' compensation laws because jobs in these industries now pose less risk.

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Definitions:

Countercurrent Exchange

A mechanism in organisms where two fluids flow in opposite directions, exchanging properties (such as heat or solutes) to allow for efficient transfer.

Concurrent Exchange

A mechanism often seen in biological systems where two substances flow in opposite directions and exchange properties or elements, enhancing efficiency.

Oxygen Extracted

The process of removing oxygen from a compound or an environment, often to produce a specific chemical reaction.

Spiracles

Small openings on the surface of some animals, like insects, that lead to the respiratory system, allowing gas exchange.