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WORKING
TERMS
• Wages – compensation from a firm to a worker based on time or pieces completed
• Salary – Fixed pay amount irrespective of hours or productivity
• Derived Demand – Firms demand workers for their production value
– The more value the worker or the more value the final product
the better paid the worker
CAREER RESEARCH
• Pick 2 or 3 careers
• Complete for each
Job National Avg Wisconsin Avg Outlook Prep Zone
2wire961 pw 469 3118 763
• Line all careers up
• Highest to lowest
• Look for trends….
OCCUPATIONWAGE
DIFFERENCES Supply-Side
•Level of training/Education
•Level of Experience
•Location
•Compensating Differentials –
yuck v fun factor
Demand-Side
•Demand for final good
MARKET REASONS FOR WAGE
DIFFERENCES
LOW WAGES
• Low demand for final good,
thus low demand for workers
• Plentiful supply of workers
HIGH WAGES
• High demand for final good,
thus high demand for workers
• Restricted supply of workers
INDIVIDUAL
DIFFERENCES
•Education
•Experience
•Effort – signal?
•Negotiation
•Preferences
•Winner take All
Alex Rodriguez, 3B
$29 mil for 2013
Elian Herrara, 3B
$0.5 mil for 2015
HUMAN CAPITAL AND SIGNALS
Grit TedTalk
WAGE DIFFERENCE EXPLANATIONS
1) ARETHERE DIFFERENCES?
WORKSHEET
• https://www.youtube.com/watch?
v=Scp7s3vqTpw
2) WHY?
• Market
• Individual
• Structural
• Cultural
• Exploitation
• So which part is discrimination?
WHEN IS IT WAGE
DISCRIMINATION?
SOME DEFINITIONS
• Racism – belief in inherited differences
• Prejudice – pre-judgement based on external characteristics and
refusal to accept contrary evidence
• Discrimination – action that treats individuals differently
• Bias – Preference for one group
TYPES OF DISCRIMINATION
• Wage discrimination
• Employment discrimination
• Occupational discrimination
• Statistical discrimination
• Institutional discrimination
WAGE DISCRIMINATION
Same job yet different pay
NOT DISCRIMINATION IF REQUIRES
DIFFERENT LEVELS OF PREPARATION
EMPLOYMENT DISCRIMINATION
•Last hired &
First fired
OCCUPATIONAL DISCRIMINATION
“Men’s” jobs and “Women’s”
jobs
IF NO DISCRIMINATION, SHOULD
SEE SIMILAR BREAKDOWN IN ANY
JOB
the same percentages in any job as in the overall population:
»Women 51%, Men 49%
JOBS BY GENDER
• http://www.stanford.edu/group/scspi/cgi-bin/facts.php
DISCRIMINATION OR FAVORITISM?
WHAT IS THE DIFFERENCE AND DOES IT
MATTER?
• Blindspot interview
• 4 min radio clip
STATISTICAL DISCRIMINATION
• Lack perfect information about
candidates ability and future
MATERNITY LEAVEVS
PARENTAL LEAVE
INSTITUTIONAL DISCRIMINATION
Discrimination of opportunity
Virtuous or Vicious Cycle?
Socially reinforced?
NEIGHBORHOOD SEGREGATION:
HISTORICAL RESTRICTIONS AND SLIGHT
PREFERENCES – SCHNELLING VIDEO
BUT WHAT IF IT ISN’T DISCRIMINATION?
»Just a desire for more flexible jobs…
AS YOU LISTEN CONSIDER
» Freakonomics radio, (5 minutes)
» Why do women have different work histories than men?
» Why do women traditionally choose different jobs?
» What about for men and women in the same jobs? What pay difference would you expect?
WHY IS THE PAY GAP SMALLER FOR
YOUNGER WOMEN?
MEASURING DISCRIMINATION
• Compare the population average to the area of interest average
• Regression analysis
SO WHY A PAY DIFFERENCE?
• Same education levels – different fields
• Same fields – different specialties
• Same labor force participation – different hours
• Same family size – different time off
• But, sometimes discrimination

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Wages hs

Editor's Notes

  1. https://encrypted-tbn1.gstatic.com/images?q=tbn:ANd9GcSGxKtWoKZNWxnh2eRKLOJy68MnicFNyLRpGmlyqDtGVIQg2qW5
  2. http://www.bls.gov/emp/ep_chart_001.htm
  3. http://www.npr.org/blogs/codeswitch/2013/04/22/177455764/What-Does-Modern-Prejudice-Look-Like
  4. http://conversableeconomist.blogspot.com/2012/02/parental-leave-in-other-countries.html
  5. Chart: http://involved.unl.edu/bias-report
  6. Even better: Parable of the polygons page. http://ncase.me/polygons/ http://en.wikipedia.org/wiki/File:2000census-_Black_Residential_Segregation.JPG http://colorlines.com/archives/2010/09/_ever_wonder_just_how.html
  7. http://www.freakonomics.com/2012/03/23/the-patent-gap-a-new-marketplace-podcast/
  8. http://www.bls.gov/opub/ted/2006/oct/wk1/art02.htm