Family6 Discr

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  • 08/31/09
  • 08/31/09
  • Family6 Discr

    1. 2. <ul><li>On male-female pay gap </li></ul><ul><ul><li>Researchers decompose the pay gap into the portion explained by differences in productivity characteristics and the portion unexplained (discrimination). </li></ul></ul><ul><ul><ul><li>2/3 of the pay gap can be explained by differences in experience, industry, occupation, etc. </li></ul></ul></ul><ul><ul><ul><li>1/3 is unexplained </li></ul></ul></ul><ul><ul><ul><li>This is one example of study, other studies have different results </li></ul></ul></ul><ul><ul><li>Pay gap has been falling equally due to a rise in relative productivity characteristics of women and a decline in the unexplained gap. </li></ul></ul><ul><li>On black-white pay gap </li></ul><ul><ul><li>89% of pay gap can be explained by differences in productivity characteristics. </li></ul></ul><ul><ul><ul><li>difference in education diminished and shrunk the gap. </li></ul></ul></ul><ul><ul><ul><li>payoff to education has risen which expanded the gap. </li></ul></ul></ul>Evidence
    2. 3. <ul><li>Part of the gender wage gap is the result of rational choices made by women? </li></ul><ul><ul><li>To work fewer/flexible hours </li></ul></ul><ul><ul><li>To choose safer less effort-intensive occupations </li></ul></ul><ul><ul><ul><li>Occupational segregation may be due to women choosing occupations, such as nursing and teaching, with skills that are useful in home production. </li></ul></ul></ul><ul><ul><li>To take time off for childcare </li></ul></ul><ul><ul><ul><li>Due to shorter work careers, it is rational for women to invest less in education and training. </li></ul></ul></ul><ul><ul><ul><li>Their stock of human capital will deteriorate when they are out of the labor force. </li></ul></ul></ul><ul><li>Do women invest less in human capital because of discrimination? </li></ul><ul><ul><li>Women stay out of the labor force because of the low pay in the labor market. </li></ul></ul><ul><ul><li>If discrimination declined, then more women may decide to remain single or childless. </li></ul></ul>Rational Choice or Discrimination?
    3. 5. Occupational Segregation <ul><li>Definition: crowding of men into “men’s jobs” and women into “women’s jobs” </li></ul><ul><li>Duncan Index : a summary measure for an economy used to measure the degree of occupational segregation. </li></ul><ul><li>S = ½ *  i  M i - F i  </li></ul><ul><ul><li>M i , F i are % males/females in LF who work in occupation i. </li></ul></ul><ul><ul><li>If no occup segregation, M i = F i and so the difference = 0 so S=0. </li></ul></ul><ul><ul><li>If much segregation, M i – F i is a big number and so S is large. </li></ul></ul><ul><ul><li>With complete segregation, S = 100. </li></ul></ul><ul><ul><li>S = % M or W who would have to change occupation to eliminate segregation. </li></ul></ul>
    4. 6. <ul><ul><li>two people with same work characteristics </li></ul></ul><ul><ul><ul><li>Productivity, preferences </li></ul></ul></ul><ul><ul><ul><li>but different group (race, sex, age) </li></ul></ul></ul><ul><ul><li>receive different outcomes in labor market </li></ul></ul><ul><ul><ul><li>wages, hiring, promotion </li></ul></ul></ul><ul><li>Wage discrimination </li></ul><ul><ul><li>Less pay for doing the same work </li></ul></ul><ul><li>Occupational job discrimination </li></ul><ul><ul><li>restricted from entering some occupations </li></ul></ul><ul><li>Human capital discrimination </li></ul><ul><ul><li>less access to productivity-increasing opportunities such as formal schooling or on-the-job training </li></ul></ul><ul><li>Employment discrimination </li></ul><ul><ul><li>not hired, unemployed </li></ul></ul>Wage Differentials: Discrimination
    5. 7. <ul><li>employers base decisions upon the average characteristics of the group to which they belong </li></ul><ul><ul><li>Age, education, race, gender and experience provide some information about productivity </li></ul></ul><ul><ul><li>imperfect predictors of productivity </li></ul></ul><ul><ul><ul><li>Gender may provide information on job commitment - women on average have higher turnover rates. </li></ul></ul></ul><ul><ul><ul><li>Race may provide some information about schooling quality - blacks on average go to inferior schools than whites. </li></ul></ul></ul><ul><ul><ul><li>Young males pay higher insurance rates since they have more accidents on average </li></ul></ul></ul><ul><ul><ul><li>Asians have good IT skills </li></ul></ul></ul><ul><li>Employers are not malicious in practicing this type of discrimination </li></ul><ul><ul><li>They gain since they minimize hiring costs </li></ul></ul><ul><li>Harmed: Workers different from average </li></ul><ul><li>Statistical discrimination will diminish if average characteristics of the groups converge over time </li></ul>Statistical Discrimination
    6. 8. <ul><li>Assume men and women are equally productive </li></ul><ul><li>Prejudiced employer: hires men, pays women less </li></ul><ul><ul><li>Result of discrimination: women earn less than they would earn in absence of discrimination. </li></ul></ul><ul><li>Non-discriminatory employers randomly hire men and women, paying the same wage </li></ul><ul><ul><li>Firms hiring women have lower labor costs then firms hiring just men </li></ul></ul><ul><ul><li>so firms with women have higher profits </li></ul></ul><ul><ul><li>non discriminating employers drive discriminating employers out of business </li></ul></ul><ul><li>Competition should eliminate discrimination </li></ul><ul><li>So why doesn’t discrimination disappear? </li></ul><ul><ul><li>Not enough non-discriminating firms </li></ul></ul><ul><ul><li>Imperfect competition – no free firm entry </li></ul></ul><ul><ul><li>Imperfect information about prospective workers </li></ul></ul>Becker’s Theory of Discrimination
    7. 9. <ul><li>Equal Pay Act of 1963 requires that men and women doing the same job to be paid the same. </li></ul><ul><ul><li>Firms could avoid the law’s requirements conducting employment discrimination (e.g., not hiring females for jobs held by males) . </li></ul></ul><ul><li>Civil Rights Act of 1964 outlaws both wage discrimination and employment discrimination. </li></ul><ul><ul><li>Applies to race, gender, color, religion, and national origin. </li></ul></ul><ul><ul><li>Applies to private employers, labor unions, and governments. </li></ul></ul><ul><li>Firms with more than $50,000 of government contracts must develop affirmative-action programs . </li></ul><ul><ul><li>Firms must a develop plan to hire more women and minorities if the firm has a smaller of proportion of women and minorities than in the available labor force. </li></ul></ul><ul><ul><li>These programs have been under legal and political attack. </li></ul></ul>Antidiscrimination Policies
    8. 10. To study the earnings gap: Regression analysis <ul><li>fit a linear relationship </li></ul><ul><ul><li>Y = a + bX + u </li></ul></ul><ul><li>X, independent variable: education, age, gender, race, expreince </li></ul><ul><li>Y, dependent variable: earnings </li></ul><ul><li>how does a change in X cause Y to change? </li></ul><ul><li>Y = a + bX + u </li></ul><ul><li>get data on Y, X </li></ul><ul><ul><li>multiple observations </li></ul></ul><ul><li>use regression analysis to estimate a and b </li></ul>

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