Suppose that education is the only factor that affects productivity and that an additional year of education raises wages by 2%.   Suppose in 2011 gender wage gap was 13%, and the average man had 15 years of education while the average women had 14 years of schooling.  a) Using the wage gap decomposition technique, calculate how much of the 13% wage differential is due to discrimination? b) Now suppose in 2021 the gender wage gap is 10%, but the average woman’s education level is increased to 17 year and the average man’s education increases to16 years. (Assume that the return to education stays same at 2%), Was there a decrease or an increase in wage discrimination in the decade?  Why

Principles of Microeconomics
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Chapter19: Earnings And Discrimination
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Suppose that education is the only factor that affects productivity and that an additional year of education raises wages by 2%.   Suppose in 2011 gender wage gap was 13%, and the average man had 15 years of education while the average women had 14 years of schooling. 

a) Using the wage gap decomposition technique, calculate how much of the 13% wage differential is due to discrimination?

b) Now suppose in 2021 the gender wage gap is 10%, but the average woman’s education level is increased to 17 year and the average man’s education increases to16 years. (Assume that the return to education stays same at 2%),

Was there a decrease or an increase in wage discrimination in the decade?  Why?

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