Question: Which statement explains why occupations that require many years of education, such as doctors, have higher salaries than an occupation that requires far less training?

Which statement explains why occupations that require many years of education, such as doctors, have higher salaries than an occupation that requires far less training? The salary would need to be higher to induce people to cover the cost of the extra investment in human capital, given that fewer years to work will be available after schooling is completed. The demand for higher skilled services is stronger than the demand for lower skilled levels. The supply of workers seeking higher salaries is greater, and the higher supply leads to a higher equilibrium salary. The marginal return to investment in education rises as the investment moves to higher levels of education

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!