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Chapter 1. Gender Differences & Economics Different economic outcomes Why are men and women different? Using economics to explain differences Different.

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Presentation on theme: "Chapter 1. Gender Differences & Economics Different economic outcomes Why are men and women different? Using economics to explain differences Different."— Presentation transcript:

1 Chapter 1. Gender Differences & Economics Different economic outcomes Why are men and women different? Using economics to explain differences Different economic outcomes Why are men and women different? Using economics to explain differences

2 Men vs. Women differences in work history labor force participation differences in earnings gender wage gap differences in occupations occupational segregation differences in work history labor force participation differences in earnings gender wage gap differences in occupations occupational segregation

3 differences in education years of schooling type of skills differences in the household household role impact of marriage impact of divorce working & power in the household differences in education years of schooling type of skills differences in the household household role impact of marriage impact of divorce working & power in the household

4 in this course we examine data that documents these differences how does economic theory explain differences? should policies address these differences? we examine data that documents these differences how does economic theory explain differences? should policies address these differences?

5 Policies do affect men and women differently welfare reform affirmative action no fault divorce child care foreign aid welfare reform affirmative action no fault divorce child care foreign aid

6 Why are men and women different? because they are born differently? “nature” because they are raised differently? “nurture” “nature vs. nurture” because they are born differently? “nature” because they are raised differently? “nurture” “nature vs. nurture”

7 exampleexample fact: most elementary school teachers are women Are women biologically driven to want to work with children given their role in reproduction? (nature) Does society encourage women to pursue careers with children? (nurture) or both? fact: most elementary school teachers are women Are women biologically driven to want to work with children given their role in reproduction? (nature) Does society encourage women to pursue careers with children? (nurture) or both?

8 nature vs. nurture debate is ongoing, not easily resolved BUT answer has policy implications if differences driven by nature, then policies to address them may not work nature vs. nurture debate is ongoing, not easily resolved BUT answer has policy implications if differences driven by nature, then policies to address them may not work

9 Using economics economics studies choices individuals households firms government economics studies choices individuals households firms government

10 ScarcityScarcity resources are limited, wants are unlimited choices are necessary because resources are scarce resources are limited, wants are unlimited choices are necessary because resources are scarce

11 choose one alternative, give up another lose out on benefits of next best alternative (opportunity cost) choose one alternative, give up another lose out on benefits of next best alternative (opportunity cost)

12 exampleexample NYS budget limited amount of raise-able revenue many choices -- education, prisons, health care... NYS budget limited amount of raise-able revenue many choices -- education, prisons, health care...

13 opportunity cost of $20 million capital expenditure on SUNY campuses: benefits of adding on to prison in Auburn OR benefits of expanding Child Health Plus opportunity cost of $20 million capital expenditure on SUNY campuses: benefits of adding on to prison in Auburn OR benefits of expanding Child Health Plus

14 gender example time is the ultimate scarce resource dividing time between work, childcare, chores, leisure men and women make different choices here time is the ultimate scarce resource dividing time between work, childcare, chores, leisure men and women make different choices here

15 scarcity means choices, and choices mean costs

16 How to choose? we assume that people are rational: choose to maximize well-being rational choices weigh benefits and costs over time are consistent show foresight use all available information we assume that people are rational: choose to maximize well-being rational choices weigh benefits and costs over time are consistent show foresight use all available information

17 alternativesalternatives irrational or random behavior unpredictable against self-interest command-following behavior maximize well being of others traditional behavior choose based on past behavior or customs in society irrational or random behavior unpredictable against self-interest command-following behavior maximize well being of others traditional behavior choose based on past behavior or customs in society

18 example: deciding to go to college rational decision compare costs: tuition, fees, books, value of time to the benefits: fun, value of learning, higher future income, higher life satisfaction costs are immediate, benefits are long term rational decision compare costs: tuition, fees, books, value of time to the benefits: fun, value of learning, higher future income, higher life satisfaction costs are immediate, benefits are long term

19 random decision flip a coin, heads “college” command-following decision mom and dad want me to go to college traditional decision everybody in my peer group goes to college random decision flip a coin, heads “college” command-following decision mom and dad want me to go to college traditional decision everybody in my peer group goes to college

20 Is an outcome good or bad? what criteria do we use to decide if an outcome is good or bad?

21 Statements about outcomes positive vs. normative statements positive statements statements of fact verified as true or false “Students who attend class earn higher grades on average” positive vs. normative statements positive statements statements of fact verified as true or false “Students who attend class earn higher grades on average”

22 normative statements value judgements not testable “Students should attend class.” normative statements value judgements not testable “Students should attend class.”

23 examplesexamples “Over 60% of women with children under 6 work” positive “Women should get paid maternity leave” normative “Over 60% of women with children under 6 work” positive “Women should get paid maternity leave” normative

24 Is an outcome good or bad? depends on criteria for judging Efficient outcome agents allowed to max well-being? does it use scarce resources to produce output that society values the most? may be more than one depends on criteria for judging Efficient outcome agents allowed to max well-being? does it use scarce resources to produce output that society values the most? may be more than one

25 efficient outcome may not be equitable or “fair” moral judging an outcome as good or bad depends on criteria efficient outcome may not be equitable or “fair” moral judging an outcome as good or bad depends on criteria

26 criticisms of economics is behavior rational? is efficiency the best criteria for judging an outcome? do men and women differ in decision making, or in how they judge outcomes? is behavior rational? is efficiency the best criteria for judging an outcome? do men and women differ in decision making, or in how they judge outcomes?


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