REVIEW SHEET FOR EC325
Roughly twenty points of the final will be devoted to material cover material from the lecture before
the last midterm through the end of the course (discrimination and welfare reform). The rest of the
final will be cumulative. The two previous review sheets should be helpful for preparing for that part
of the exam.
I have not yet written the exam and therefore cannot tell you the format. I expect that it will be similar
to the midterms. The following is a guide to the sorts of things you should think about. IT IS NOT
EXHAUSTIVE.
1. If students learn marketable skills in school, will raising standards increase or decrease the dropout
rate?
2. What is the multitask principal agent problem? How is it relevant to the testing debate?
3. NCLB requires schools and school districts to make Adequate Yearly Progress both for students in
aggregate and for any sub-groups (race/ethnicity, limited English proficient, free or reduced price
lunch, special education). Discuss the advantages and disadvantages of breaking students scores into
sub-groups.
4. What is the effect of high-stakes testing for students on high school graduation rates?
5. What is meant by “test-score inflation.” Describe the evidence supporting its existence.
6. On students in what part of the test-score distribution does No Child Left Behind encourage
teachers, schools and district to focus? Is there any evidence that they respond in the predicted way?
7. Explain how competition among school districts generates efficient provision of education in the
Tiebout model. What are the weaknesses of the model for representing the real world?
8. Why are the theoretical advantages and disadvantages of decentralized funding for education? Does
empirical research support these predictions?
9. Discuss the theoretical and empirical effects of intradistrict and interdistrict school choice on school
quality?
10. Do large-scale voucher programs (such as the Milwaukee Parental Choice Program) improve
educational outcomes for participants?
11. What does the Boston charter school study tell us about the effects of charter schools on student
performance?
12. What is meant by each of the following: intradistrict school choice, interdistrict school choice,
vouchers, charter schools?
13. What do the experiences of Chicago and of CSD 4 in New York City tell us about the effectiveness
of intradistrict school choice programs?
14. How does the change in the way that TANF is funded (relative to AFDC) change states' incentives
to provide welfare?
15. What are the issues surrounding the work requirement under PRWORA?
16. Why might a lifetime limit on how much time someone can spend on welfare cause people to leave
welfare well before they hit the time limit?
17. What were the principal elements of PRWORA?
18. Why did welfare caseloads decline in the second half of the 1990's?
19. Did welfare reform increase labor force participation among low-skill women with children?
20. Did welfare reform help or hurt women who would have been eligible for AFDC?
21. Did welfare reform have positive or negative effects on children?
22. What were the principal elements of New Hope? What were the results?
23. Is there a difference between discrimination and prejudice?
24. How is segregation (conceptually) distinct from discrimination?
25. Suppose that the labor market is competitive and that employers (white workers, customers) prefer
not to hire (work with, interact with) blacks. Does this generate wage discrimination, segregation or
both?
26. Would your answer to question 25 about employer discrimination change if the labor market were
not competitive?
27. Explain how each of the following models generates wage differentials between blacks and
whites?
a. Social distance (transactions costs)
b. Statistical discrimination
c. The theory of self-confirming expectations (rational stereotyping)
28. What policies would be effective in reducing black-white wage differentials under each of the
theories?
29. Describe the trend in the black-white wage ratio since 1940.
30. Why have the earnings of black and white men converged over the last 65 years? [Note: Think
about the roles of migration, convergence in education quantity, convergence in education quality,
declining labor force participation of low-skill black workers and government policy.]
31. What were the principal elements of the 1964 Civil Rights Act?
32. What have audit studies taught us about the existence of race discrimination in the labor market?
What are their limitations?
33. People with distinctively African-American names are less likely to be called for interviews, but
blacks with African-American names appear to have similar outcomes to those with names that are not
distinctively African-American. How can we reconcile these two findings?
34. Neal and Johnson find that controlling for AFQT score when the men were in high school age,
there is no difference between the earnings of black and white men. Is this compelling evidence that
there is no discrimination against black men in the labor market?
35. If we control for both AFQT and education, black men earn less than white men. Is this compelling
evidence of discrimination against black men in the labor market?
36. The annual earnings of black women and white women in the labor force are roughly equal. Does
this mean that there is no labor market discrimination against black women (relative to white women)?
37. How does the high incarceration rate of black men affect estimates of the black-white earnings
ratio?
38. What do audit studies tell us about the effect of incarceration on labor market outcomes?
39. What are the strengths and weaknesses of using statistical evidence to influence or determine the
decision in discrimination cases?
40. Discuss the role of burden of proof in disparate impact cases.
41. What was the significance of Executive Order 11246?
42. What characteristics of firms are associated with the use of affirmative action in recruiting and
hiring? How can we explain this correlation?
43. Did affirmative action in police and fire departments affect the effectiveness of these services?
44. Discuss the evidence that the IQ/test score gap between blacks and whites is at least partially
determined by environment.
45. How has the black-white test score gap changed over time on IQ and similar tests?
46. Describe the principal trends over the last thirty years in the black-white gap on the National
Assessment of Educational Progress.
47. What accounts for the black-white test score gap?
48. What is the evidence on whether “acting white” has negative consequences for black students?
49. Are primary and secondary schools in the United States resegregating?
50. Does school segregation hurt or help blacks?
51. At selective colleges, black students generally have lower SAT scores than do white students. Does
this demonstrate that selective colleges practice reverse discrimination? (Hint: see the reading by
Dickens and Kane)
52. Using the principal measures of segregation, how did housing segregation change over the 20th
century. What explains these trends?
53. Suppose that both blacks and whites prefer to live in integrated neighborhoods, explain how
differences in the blacks’ and whites’ desired racial mix in integrated neighborhoods could
nevertheless results in all neighborhoods being segregated.
54. Does neighborhood segregation have adverse effects on blacks?
55. What is the spatial mismatch hypothesis?
56. Describe the evidence on race discrimination in consumer markets, including credit, housing,
automobiles, etc.
57. Why does John List conclude that minorities are discriminated against at baseball card
conventions? Why does he conclude that this is statistical discrimination rather than taste-based
discrimination?
58. Suppose that (as some studies find) blacks whose cars are stopped and searched are no more or less
likely to be found with drugs than are whites whose cars are stopped and searched. Does this indicate
that there is no discrimination against blacks in such searches?
59. Bail bondsmen, on average, charge blacks less for a bond than they do whites for a bond of the
same amount. Does this show that bondsmen discriminate against whites?
60. Describe the mechanisms through which greater labor force withdrawal on the part of women can
generate wage differentials. Which of these would generally viewed as discrimination against women?
61. What do the restaurant audit and orchestra audition studies tell us about discrimination against
women in the labor market?
62. Is occupational segregation explained by women's preferences?
63. What do wage differentials between heterosexual and homosexual men and between heterosexual
and homosexual women tell us about the reasons for the female/male wage differential?
64. Why do men who report having had no sex in the last five years have, on average, lower earnings
than apparently otherwise similar men?
65. Describe the trend in the female-male earnings ratio since 1960. What accounts for this trend?
66. How do differences in earnings between men and women differ by marital status and presence of
children? What accounts for these differences?
67. Describe how comparable worth should affect the wages and employment of women? Does actual
experience with comparable worth in the public sector support these predictions?
In addition, you should be able to read a table, explain what the coefficients mean and know
whether the parameters are statistically significant.