These are the question from Labor Economics Please help me w

These are the question from Labor Economics. Please help me with these questions

Question 1 The present tax system has two parts. The first part subsidizes workers\' wages. The government pays each worker $2 per hour extra for each hour that they work in a week in the labor market up to a maximum payment of $40 per week. The second part is a tax on labor earnings. A 20% tax is placed on labor earnings above $400 per week (the government subsidy is not counted as earnings in this calculation). For this question, assume that leisure is a normal good for all workers. a) Boris works at a job that pays $10 per hour. He has no non-labor income. He can work at most 60 hours per week and the price of food is S1 per unit. Assuming that he consumes only food and leisure, graph Russell\'s budget constraint under the present tax system. If Boris works 50 hours per week, how much food does he buy? b) Congress is considering a change to the tax system. A bill has been put forward to eliminate both the subsidy and tax. That is, if the law passes the government will play no role in the labor market. On your graph from part a), graph how this bill would change Boris\' budget constraint. What is your prediction for how this change would affect his hour of work? c) How would your prediction of how Boris would change his hours of work after the tax change differ if he was originally working 30 hours per week? 10 hours per week? Question 2 In data, women of child-bearing age with minor children (children younger than 18) on average are less likely to be in the labor force than women without children, controlling for other factors such as race, age, etc. Tell a couple of stories about why women with children are less likely to work. The first story should be a causal story. That is, why might having children cause women to work less? The second story should be a non-causal story. That is, why might there be a negative correlation between having children and work effort but the children do not cause women to work less?

Solution

Answer2: Causal Story: Women with children have ot dedicate more time to their kids. They need ot spend time with their kids for their brought up and pay attention on them for their biological and social needs. It causes women to get lesser time to be put in their work life.

Correlation: It is common in a patriachal society to believe that woman is meant for upbringing of children. Having children does not cause women to work less but thinking pattern o other family members forces them to quit work and concentrate on bringing up of kids once they get married.

Answer3: Causal Story: Educated people maintain proper hygiene, are health cautious, provide al vaccines ot their kids and to themselves. Educated people are aware of life styles that help them to maintain good health like eating less chelostrol, going for a walk etc. It enhances the longevity of their life.

Correlation: Generally rich people live for a longer life time as they can afford better health facilities good quality fo food and all kinds of facilities. At the same time rich people can afford high education. It is richness which cause both and hence both are positively correlated but education does not cause longevity of life.