Contemporary Labor Economics 9th Edition by Campbell Mcconnell, Stanley Brue, David Macpherson, Robert Powell, David Colander

Exercise 15

Suppose that (a) employers must pay higher wages to attract workers from wider geographic areas and hence higher wages are associated with longer commuting distances (less of the amenity "closeness of job to home") and (b) females have greater tastes for having jobs close to their homes than do males. Use the hedonic wage model to show graphically why a male-female wage differential might emerge, independent of skill differences or gender discrimination.