Question

Please draw earnings profile graphs for below scenarios. Wages are on y axis and time is on x axis. Point S is where educated students graduate.

For simplicity, wage growth will be linear in all cases, and assume that at time 0, wages are 0.

1. Students earn no money while in school, and after school, educated wages jump up above non-educated wages, then both grow at the same rate
2. Students receive a lower rate of wage growth than the uneducated while in school, and then a higher rate of wage growth after school. There’s a small jump in wages at graduation, but at graduation, wages are still lower than uneducated wages.
3. Educated wages are negative and flat while in school because of tuition payments. Then, wages jump up and grow at a faster rate than non-educated wages (while student loans are paid off). Then, after loans are paid off, wages jump up again. Wages should be lower for educated than non-educated as long as loans are still being paid off.

Answer 1

a.
- SW - - - - - ------ WAGES TIME oti → TIME IN SCHOOL SW > WAGE CURVE OF SCHOOL GOING PEOPLE NW → WAGE CURVE OF NON SCHOOL GOING PEOPLE SLOPES OF THE CURVES REPRESENTS WAGE GROWTH RATE
b.
NW Sw - - - - - - WAGES - --- its TIME ts sw > TIME OF GRADUATION > WAGES OF EDUCATED PEOPLE Now → WAGES OF PEOPLE UNEDUCATED EF Jump of WAGE AT GRADUATION AT TIME
c.
S- NW ----- T - - - Sahum - - - - - te TIME X 31 () O (-)VE WAGES → E ? NW . WAGES OF NON EDUCATED PEOPLE GRADUATION TIME it & teti LOAN PAY OFF PERIOD AFTER SCHOOL E-SW WAGES OF EDUCATED PEOPLE
you can extend the curve of educated workers in question b such that it crosses the curve of the non uneducated workers.

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wishing you a great day ahead.