FIGURE E-4 Equilibrium in the market for teachers: perfect licensure test.

NOTES:

S0=supply of teachers when there is no licensure test;

S1=supply of teachers when tests are not costly;

S2=supply of teachers when tests are costly;

D0=market demand for teachers when there is no licensure test;

D1=market demand for teachers when all individuals who pass the test are competent Case I;

D2=market demand for teachers when all individuals who pass the test are competent Case 2;

T0=Number of individuals who choose the teaching occupation at wage W0;

E0=Number of individuals who choose the teaching occupation at wage W0;

E1=Number of individuals in group C employed as teachers when tests are not costly and when demand is given by D1;

E2=Number of individuals in group C employed as teachers when tests are not costly and when demand is given by D2;

E′1=Number of individuals in group C employed as teachers when tests are costly and when demand is given by D1.



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