Microeconomics Assignment: Analyzing Current Events and Economics

This assignment analyzes an article discussing the relationship between academic subjects and career earnings, applying microeconomic concepts. The student identifies the Mincer equation as a relevant model, recognizing wages as the dependent variable influenced by factors like years of schooling, experience, the chosen course of study, and the university attended. The analysis highlights how subjects like medicine, economics, and mathematics often lead to higher earnings, while also considering the impact of socio-economic background and teaching quality. The assignment demonstrates an understanding of how independent variables, such as course of study and university, affect wage earnings, which is a core concept in applied microeconomics. The student also discusses the importance of controlling for other variables that influence wages, as suggested by the assignment brief.

Running head: MICROECONOMICS
Microeconomics
Name of Student:
Name of University:
Author’s Note:

1MICROECONOMICS
The article, “If you want to maximize earnings, here’s what to study” by Marrison,
highlights about the best subjects for students that has a good career. According to various
studies, the subjects with good career are medicine and arts that carries an earning premium.
Degrees in English, pharmacology and medicine are predicted as more rewarding for women and
degrees in computer science has been more promising for men. Moreover, the study of medicine
and education works more effectively for the students coming from lower socio-economic
backgrounds. Economics and history courses are more profitable for students from higher-socio
economic backgrounds.
The efficiency level of students with lower levels of prior achievement improves when
they study with outperforming peers in areas like social care and creative arts. These subjects
requires strong guidance from the peer members which effectively improves that concepts
leading to greater productivity and outcomes (Morrison, 2016). According to a study by
Department of Education based on data of 463,000 English graduates, students from medicine,
economics and mathematics earn 30 percent more than average graduates.
Subjects like economics and medina generate 20 percent greater return than business,
architecture and computing. Whereas, creative arts graduates get 15 percent less than other
graduates on an average. Students going to private schools earn 7-9 percent more than students
from low socio economic backgrounds. Variations in earnings are also found as students study
same subject at different universities. For example, women who graduated from Cumbria
University earned 80 percent lower than students from Cambridge. This depends on the teaching
quality of the teachers where quality teaching in the graduation years helps a student’s academic
development. However, the earnings and quality of teaching various as per subjects in the same
university.

2MICROECONOMICS
Thus, the wage amount depends on the course of the study and the university chosen to
study. This can be represented from Mincer equation that relates wages to years of schooling and
experience,
Wage si=αi + β 1i Schooling+ β 2i Experience+ Xi +εi
The course and opted university acts as the independent variable that changes the value of
wage earning. Factors like socio-economic background and interest of students also acts as
independent variable for evaluating the course of the study.

3MICROECONOMICS
Reference List
Morrison, N. (2016). If You Want To Maximize Earnings, Here's What To Study (And Where).
Retrieved 19 January 2020, from
https://www.forbes.com/sites/nickmorrison/2018/06/07/if-you-want-to-maximize-
earnings-heres-what-to-study-and-where/