Show how the economic theory of consumer behaviour can be applied to study an individual’s labour supply decision. Using simple graphs or otherwise, explain how the impact of a rise in the wage rate can be understood using the Slutsky decomposition. In lectures we studied the paper by Claudia Goldin (2006), “The Quiet Revolution that Transformed Women’s Employment, Education, and Family.” Explain in detail how supply and demand factors influenced developments in female labour in the US through the twentieth century. In your answer explain how shifts in the income and substitution effects can help us understand these developments. Does Goldin argue that the catch up for women relative to men has stalled in the more recent time period?
