2- Suppose you want to measure the impact of low skilled workers in the labor ma
ID: 1167636 • Letter: 2
Question
2- Suppose you want to measure the impact of low skilled workers in the labor market generated by an increase in the minimum wage. To do so, you?re going to use the D-I-D methodology. Use the following information to design your experiment. a) Which kind of data would you collect to do your experiment? b) What could be a potential problem threatening the robustness of your results? c) If you were God and could choose the design of the legislation. How would you do it to make sure you?re going to get the accurate effect of the increase of minimum wage on low skilled workers participation?Explanation / Answer
1. The data collected by using D-I-D methodology is Observational study data. The observational study is the primitive method of collecting data. Here we observing directly from the data. The obsevational study is a method of data collection researchers collect data based on what is seen and heard. Here other variables are not influanced in the data collection. In this case we observe that asking each worker to his working ability, number of hours he is working,
2. The problems are faced by the collection of data is:
1. observational data always generates huge amount of data.
2.The quality of data entirly depends upon the skills of the resaercher
3. This method is huge time spending.
3. We know the increase in the minimum wages leads to decrease in the job available for the workers. When i design for a legislation The best way to increase minimum wages of low skilled workers is increased productivity by training. Best training will lead to increase the efficiency of the workers.
Another way of improve low skilled worker is that job modification. Another way is that to given incentive to the worker. When we increase the minimum wages causes the output exapnsion of the industry. When output expanded the overall profit will automatically increased.
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