The Minimum Wage

EC480 (Analysis of Labor Markets) Tier II Writing Assignment Professor Steven J. Haider Fall 2016
9/23/2016 Page 1
The assignment The writing assignment for this class, which is designed to satisfy MSU?s Tier II writing requirement and hence justifies the ?W? in the course designation, is to answer a more detailed version and extension of a problem set question. The writing assignment is designed in this way to (a) reinforce the problem set material to enhance a student?s understanding of the core course material, (b) allow the student the opportunity to translate our typical graphical- and algebra-based analyses into a discussion-based analysis, and (c) allow the student to focus on the process of formulating a well-written discussion, rather than the process of undertaking research.
The writing assignment question is assigned based on the last digit of your PID. These questions are listed in Table 1 below. Written assignments will not be accepted if the student chooses an alternative question to answer.
The requirements All memos must adhere to the following requirements. ? Double-spaced, 1 inch margins, a standard 12 pt font ? Length between 500 and 750 words in the body of the memo (which is about 2 to 3 pages) ? Submitted electronically in either Word or PDF format. ? The top of the first page must contain the following information, left justified.
Name: [your name] PID: [your PID] Date: [date of submission] Paper Topic: [give topic title that corresponds to last digit of PID from Table 1] Words: [number of words in the body of the memo, excluding any words in figures or tables that are provided]
? It may be useful to include a picture or a graph or a table. If choose to do so, it needs to be included in the same document, so that it can easily be referenced by the reader. ? The level of discussion and description should be suitable so that a student who successfully completed EC301 or its equivalent could follow your discussion. ? The discussion should primarily be drawn from our problem set material and textbook material and lecture material. Students are discouraged from doing additional research?that is not the point of this writing assignment. ? The paper must be structured as essay that addresses the various issues and questions that are provided as guidance. Do not treat this as a short-answer exercise (that was done for the problem sets). Your essay should generally be
EC480 (Analysis of Labor Markets) Tier II Writing Assignment Professor Steven J. Haider Fall 2016
9/23/2016 Page 2
focused around the specific issues and questions that are provided, although you need not address every issue and you can raise some of your own.
Grading ? The grading will follow the rubric listed on the last page. ? The paper is due by 5:00pm on the day listed on the course schedule. Points are deducted for each day the paper is late. ? The first due date is not for a rough draft! Rather, consistent with the Tier II writing assignment requirements, it is a chance for students to submit a complete paper to get feedback. The second due date is optional: If students are unsatisfied with the grade they received on their first submission, they can submit a revised version of their paper, taking into account the feedback provided on the first draft. If the resubmission is better, the students will receive the second grade; no grades will be lowered based on the second submission.1
Please note, students are responsible for understanding and complying with university plagiarism guidelines. Students must complete this assignment by themselves, using their own word, unless appropriate attribution is made. Cheating, including plagiarism, is taken seriously. It will be reported to the College and a penalty grade will be assessed for the class (not necessarily just for the assignment).

1 The one exception to this is that, at any point, the discovery of plagiarism or any form of cheating will be penalized.
EC480 (Analysis of Labor Markets) Tier II Writing Assignment Professor Steven J. Haider Fall 2016
9/23/2016 Page 3
Table 1: Question Assignments
PIDs ending in: Question Assignment 1, 2 Topic: Long Run Labor Force Participation Trends Over the last 50 years, the labor force participation rate declined for men and increased for women. Discuss whether the following factors could have contributed to one or both of the trends: (a) an increase in worker productivity, (b) an increase in wealth, (c) a reduction in discrimination against women, (d) a reduction in average family size, and (e) an increase in educational attainment. Are any important factors missing from this analysis? 3, 4 Topic: Welfare vs. EITC The typical welfare program (cash assistance for poor families) has several components: a guaranteed income level, an earnings disregard, and then a rate at which the benefits are reduced (a benefit reduction rate, which can also be viewed as a tax on earnings). Provide a discussion of the labor supply incentives that these components induce. Compare and contrast such a program with the incentives in an EITC. Does the empirical evidence support the basic predictions regarding the effects of the EITC on labor force participation? 5, 6 Topic: The Minimum Wage According to our standard model, how does the minimum wage affect the labor market? What determines the effect of the minimum wage on employment? Unemployment? Why? Michigan is currently increasing its minimum wage from $8.15 to $9.25. What is your best guess regarding its effect on employment? Why? Are any important factors about the minimum wage missing from the standard model? 7, 8 Topic: Mandated Benefits vs. Pay Roll Taxes How do mandated benefits affect labor market outcomes? Why and when do these outcomes differ from those resulting from a payroll tax? What does this discussion imply about whether (a) employers should be mandated to offer health insurance to their employers or (b) the government should levy taxes and run its own health insurance scheme? What factors are missing from this analysis? 9, 0 Topic: Immigration Under what conditions would our standard economic models suggest that immigrants reduce the wage of native workers? Take away ?jobs? from native workers? How does the answer vary between the short run and the long run? Suppose the US decided to admit enough immigrants to increase the labor force by 2%. What is your best guess regarding its effect on employment? Why?
EC480 (Analysis of Labor Markets) Tier II Writing Assignment Professor Steven J. Haider Fall 2016
9/23/2016 Page 4
Grading Rubric
Points Received and Comments Mechanics, 30 points ? Format (form, length, margins, etc.) ? Spelling ? Grammar ? Punctuation
Clarity of writing, 30 points ? Sentence structure (Do they make sense? Do they read well?) ? Paragraph structure (Is there a clear topic? Does the paragraph develop that topic?) ? Overall essay structure (Does the essay clearly set out the topic/question? Does the essay clearly answer that question? Are the conclusions clear and well-justified?) Economic content, 40 points ? Are the key economic concepts from class covered? ? Are the economics discussed in a clear and correct manner?
Late penalty, 3 points per day
General comments
Essay Score
NOTE: Poor mechanics can absolutely affect clarity of writing, and essays will be graded to allow those spillovers to happen. In other words, do not be surprised if a low mechanics score leads to a poor clarity of writing score.
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