I. Comprehension questions

1. Why is labour heterogeneous?

2. What are the sources of pay differentials?

3. How does education contribute to earnings?

4. What is human capital?

5. Why do people with more educational qualifications typically earn more?

6. What does productivity depend on?

7. What is the role of innate abilities?

8. Does investment in further education make sense? What may be the costs and benefits?

9. Why is the unemployment rate lower for graduates than for unqualified school-leavers?

10. What are non-monetary benefits to education?

11. Why can a history graduate go on to earn big money in banking?

12. How does the theory of signalling work?

13. Is education good for society?

14. Is education a luxury?

15. What made you go to university? How may your individual decision reflect on your future life?

II.Vocabulary

1. human capital — человеческий капитал (способности и трудовые навыки, приложение которых приносит доход);

2. to be unqualified — не иметь образования;

3. educational investment — вложения в образование;

4. opportunity cost — издержки неиспользованных возможностей;

5. educational grant — стипендия;

6. extra wage — дополнительная заработная плата;

7. wage claims — желаемая заработная плата;

8. to outweigh — перевесить;

9. productivity — производительность;

10. innate ability — врожденные способности;

11. high-ability (lower-ability) worker — способный (менее способный) работник;

12. pay differential — различия в заработной плате.

III.Translate from Russian into English

1. Средний американец, который осуществляет инвестиции в образование в колледже, зарабатывает больше, чем выпускник школы.

2. Расходы на образование — включая общее и специальное, подготовку по месту работы и т. д. — являются наиболее очевидным и, вероятно, наиболее важным видом инвестиций в человеческий капитал.

3. Инвестиции в человеческий капитал — это любое действие, которое повышает квалификацию и способности, или, другими словами, производительность труда рабочих.

4. Расходы на образование — включая подготовку по месту работы и т. д. — являются наиболее важным видом инвестиций в человеческий капитал.

5. Теория человеческого капитала помогает обосновать дифференциацию зарплаты.

6. Инвестиции в образование будут давать дополнительный доход в течение жизни, который будет получать выпускник колледжа , по сравнению с выпускником средней школы.

7. Более высокий уровень образования имеет существенное значение при объяснении высокого уровня реальной зарплаты в США.

8. Повышает ли образование чью-либо производительность на рынке труда?

9. Зарабатывают ли больше те, кто получает больше образования, т.к. они более способны генетически и более мотивированы?

IV. Communicative practice. Situations

1. Role play a family talk. The parents want their child (a school-leaver) to go on in education and enter a university. She or he would d rather go to work. Discuss immediate costs and benefits.

2. University-educated workers now earn a smaller wage differential than in 1960s. (a) What effect would this have on the incentive to go to university? Why? (b) Suppose it was shown that going to university added nothing to life-time income potential. Would anyone still go to university? Why?

3. A worker can earn 20000 pounds a year for the next 40 years. Alternatively, the worker can take three years off to go on a training course whose fees are 7000 pounds per year. If the government provides an interest-free loan for this training, what future income differential per year would make this a profitable investment in human capital?

4. Explain the terms “high-ability worker” , “high-career potential”, “human capital”.

5. Apprentices are typically paid low wages. Using the concept of human capital, explain this observation.

6. Show why the following statements are incorrect; (a) Women earn less than men. Employers must be sexists. (b) People who study ancient history at university learn nothing about running a business. They would earn higher salaries if they joined companies at the age of eighteen. (c) Free schooling between sixteen and eighteen means that children from poor families can stay on in education as easily as children from wealthy families.

7. Suppose you’re a woman who wants to apply for a job. Would it be essential for you to know that your earnings will be lower than those of men? Which occupation are you most likely to have: professional, managerial, arts and sports, selling, personal and domestic service, other manual jobs? Why? Is it a version of the problem of moral hazard?

8. Firms usually discover a woman’s marital status, because there is a presumption that single women are less likely to interrupt their career than married women. Besides, single women on average earn much more than married women. If you were searching for a job would it matter for you? What is your priority: family or career?