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spelling check (#527)
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longye-tian authored Jul 23, 2024
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Expand Up @@ -31,7 +31,7 @@ Our presentation is "incomplete" in the sense that it is based on a single equa

This ''equalizing difference'' equation determines a college-high-school wage ratio that equalizes present values of a high school educated worker and a college educated worker.

The idea is that lifetime earnings somehow adjust to make a new high school worker indifferent between going to college and not going to college but instead going to work immmediately.
The idea is that lifetime earnings somehow adjust to make a new high school worker indifferent between going to college and not going to college but instead going to work immediately.

(The job of the "other equations" in a more complete model would be to describe what adjusts to bring about this outcome.)

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We suppose that $R, \gamma_h, \gamma_c, T$ and also $w_0^h$ are fixed parameters.

We start by noting that the pure equalizing difference model asserts that the college-high-school wage gap $\phi$ solves an
"equalizing" equation that sets the present value not going to college equal to the present value of going go college:
"equalizing" equation that sets the present value not going to college equal to the present value of going to college:


$$
Expand Down Expand Up @@ -257,7 +257,7 @@ plt.ylabel(r'wage gap')
plt.show()
```
Notice how the intitial wage gap falls when the rate of growth $\gamma_c$ of college wages rises.
Notice how the initial wage gap falls when the rate of growth $\gamma_c$ of college wages rises.
The wage gap falls to "equalize" the present values of the two types of career, one as a high school worker, the other as a college worker.
Expand Down Expand Up @@ -298,7 +298,7 @@ What we used to call the college, high school wage gap $\phi$ now becomes the ra
of a successful entrepreneur's earnings to a worker's earnings.
We'll find that as $\pi$ decreases, $\phi$ increases, indicating that the riskier it is to
be an entrepreuner, the higher must be the reward for a successful project.
be an entrepreneur, the higher must be the reward for a successful project.
Now let's adopt the entrepreneur-worker interpretation of our model
Expand Down Expand Up @@ -427,7 +427,7 @@ Now let's compute $\frac{\partial \phi}{\partial D}$ and then evaluate it at the
Thus, as with our earlier graph, we find that raising $R$ increases the initial college wage premium $\phi$.
Compute $\frac{\partial \phi}{\partial T}$ and evaluate it a default parameters
Compute $\frac{\partial \phi}{\partial T}$ and evaluate it at default parameters
```{code-cell} ipython3
ϕ_T = ϕ(D, γ_h, γ_c, R, T, w_h0).diff(T)
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