Discrimination. Study Materials and Reading List Mariola Pytliková. VŠB-TechnicalUniversityOstrava, CReAM, IZA, CCP and CELSI

Similar documents
Employer Attitudes, the Marginal Employer and the Ethnic Wage Gap *

Employer Attitudes, the Marginal Employer and the Ethnic Wage Gap *

Applied Economics. Department of Economics Universidad Carlos III de Madrid

Measuring discrimination against immigrants and ethnic minorities. Results of a correspondence test (audit study).

Explaining the 40 Year Old Wage Differential: Race and Gender in the United States

WHO MIGRATES? SELECTIVITY IN MIGRATION

MAGNUS CARLSSON, LUCA FUMARCO & DAN-OLOF ROOTH 2015:1. Does Labor Market Tightness Affect Ethnic Discrimination in Hiring?

Do Reported Attitudes towards Immigrants Predict Ethnic Discrimination?

Field experiments on ethnic discrimination in the Swedish housing and labor market

Introduction. Ability, Effort, and Chance. Compensating Differentials. In this chapter, look for the answers to these questions:

6/4/2009. The Labor Market, Income, and Poverty. Microeconomics: Principles, Applications, and Tools O Sullivan, Sheffrin, Perez 6/e.

Final, Form A Winter 2007 C. Tremblay

Volume 29, Issue 4. Ethnic Discrimination in the Market Place of Small Business Transfers

The Great Black Migration: Opportunity and competition in northern labor markets

Racial wage differentials in developed countries

Demography, Immigration and Labor Markets (4.5 ECTS) Spring 2018

Neighborhood signaling effects, commuting time, and employment Evidence from a field experiment

Chapter 17. The Labor Market and The Distribution of Income. Microeconomics: Principles, Applications, and Tools NINTH EDITION

Differences in remittances from US and Spanish migrants in Colombia. Abstract

THE GENDER WAGE GAP AND SEX SEGREGATION IN FINLAND* OSSI KORKEAMÄKI TOMI KYYRÄ

Wage Differentials and Wage Determinants:

The immigrant-native pay gap in Germany

Does Labor Market Tightness Affect Ethnic Discrimination in Hiring?

Labor Earnings, Discrimination, and the Racial Composition of Jobs

RETURNS TO EDUCATION IN THE BALTIC COUNTRIES. Mihails Hazans University of Latvia and BICEPS July 2003

F E M M Faculty of Economics and Management Magdeburg

Textbook: Pierre Cahuc, Stèphane Carcillo, Andrè Zylberberg Labor Economics, 2 nd edition, 2014.

Permanent Disadvantage or Gradual Integration: Explaining the Immigrant-Native Earnings Gap in Sweden

Labour market outcomes. Public administration. Housing. Job applications (Kaas & Manger 2012) Job center inquiries (Hemker & Rink 2016)

Latin American Immigration in the United States: Is There Wage Assimilation Across the Wage Distribution?

Emigration and source countries; Brain drain and brain gain; Remittances.

EDUCATION AND WAGE GAPS: A COMPARATIVE STUDY OF IMMIGRANT AND NATIVE EMPLOYEES IN THE UNITED STATES AND CANADA

Bachelor essay. The relationship of earning differences and attitudes towards ethnic minority groups in Sweden

14.64 Spring 2017 Brendan Price

Gordon Dahl Winter 2011 READING LIST

Gender and ethnic discrimination: An introduction

I ll marry you if you get me a job Marital assimilation and immigrant employment rates

Neo-Nazism and discrimination against foreigners: A direct test of taste discrimination. Nils Braakmann * Newcastle University

Do Employers Use Unemployment as a Sorting Criterion When Hiring? Evidence from a Field Experiment

I'll Marry You If You Get Me a Job: Marital Assimilation and Immigrant Employment Rates

Wage Differences Between Immigrants and Natives in Austria: The Role of Literacy Skills

Extended abstract. 1. Introduction

14.64 Spring 2017 Brendan Price

Assessing Differences in Labor Market Outcomes Across Race, Age, and Educational Attainment. Working Paper April 2017

Reading List Version 1 Economics 515 Labour Economics. Becker, G. A Theory of the Allocation of Time Economic Journal, Sept

Do employers in Myanmar prefer workers who accumulated skills in more advanced countries? Evidence from a field experiment

Seeking similarity: how immigrants and natives manage at the labor market

Employment Discrimination in a Former Soviet Union Republic: Evidence from a Field Experiment

International gender wage. gaps SUMMARY

Does Work Experience Mitigate Discrimination?*

The wage gap between the public and the private sector among. Canadian-born and immigrant workers

A Longitudinal Analysis of Post-Migration Education

I would like to make some general comments this morning about racial discrimination and its continuing presence in the U.S. labor market.

Research Report. How Does Trade Liberalization Affect Racial and Gender Identity in Employment? Evidence from PostApartheid South Africa

Partisan news: A perspective from economics

Unequal Recovery, Labor Market Polarization, Race, and 2016 U.S. Presidential Election. Maoyong Fan and Anita Alves Pena 1

DETERMINANTS OF IMMIGRANTS EARNINGS IN THE ITALIAN LABOUR MARKET: THE ROLE OF HUMAN CAPITAL AND COUNTRY OF ORIGIN

Issues in Political Economy, Vol 26(2), 2017,

The Causes of Wage Differentials between Immigrant and Native Physicians

Berkeley Review of Latin American Studies, Fall 2013

Lecture Note: The Economics of Immigration. David H. Autor MIT Fall 2003 December 9, 2003

Executive summary. Part I. Major trends in wages

INTRODUCTION TO THE COURSE; ECONOMICS OF MIGRATION, INTRODUCTION, TRENDS AND CONCEPTS

The Components of Wage Inequality and the Role of Labour Market Flexibility

Development with Identity: African Descendants

Does more education reduce the wage gap? An analysis of labour market outcomes for native and foreign PhD (preliminary)

Economic assimilation of Mexican and Chinese immigrants in the United States: is there wage convergence?

engineers, scientists, architects, mathematicians and executives/managers.

EC 4080 Labour economics (economics of human resources) Academic Year

Refugee Versus Economic Immigrant Labor Market Assimilation in the United States: A Case Study of Vietnamese Refugees

WORKINGPAPER SERIES. Did Immigrants in the U.S. Labor Market Make Conditions Worse for Native Workers During the Great Recession?

Competitiveness: A Blessing or a Curse for Gender Equality? Yana van der Muelen Rodgers

Wage Differentials between Ethnic. Groups in Hong Kong in 2006

Chapter 9. Labour Mobility. Introduction

Female vs Male Migrants in Batam City Manufacture: Better Equality or Still Gender Bias?

Gender wage gap in the workplace: Does the age of the firm matter?

Gender preference and age at arrival among Asian immigrant women to the US

Volume 35, Issue 1. An examination of the effect of immigration on income inequality: A Gini index approach

Rethinking the Area Approach: Immigrants and the Labor Market in California,

The task-specialization hypothesis and possible productivity effects of immigration

Barriers to Reintegration:

Selection Policy and the Labour Market Outcomes of New Immigrants

Ingenuity and Creativity David Card and Alan Krueger

Prospects for Immigrant-Native Wealth Assimilation: Evidence from Financial Market Participation. Una Okonkwo Osili 1 Anna Paulson 2

Gender Variations in the Socioeconomic Attainment of Immigrants in Canada

Immigrant-native wage gaps in time series: Complementarities or composition effects?

Illegal Immigration. When a Mexican worker leaves Mexico and moves to the US he is emigrating from Mexico and immigrating to the US.

Professor Christina Romer. LECTURE 11 LABOR AND WAGES February 28, 2019

Case Study: Get out the Vote

Do (naturalized) immigrants affect employment and wages of natives? Evidence from Germany

Does Immigration Reduce Wages?

IS THE MEASURED BLACK-WHITE WAGE GAP AMONG WOMEN TOO SMALL? Derek Neal University of Wisconsin Presented Nov 6, 2000 PRELIMINARY

GLOBAL WAGE REPORT 2016/17

Race and Marriage in the Labor Market: A Discrimination Correspondence Study in a Developing Country

Department of Economics Working Paper Series

THE IMMIGRANT WAGE DIFFERENTIAL WITHIN AND ACROSS ESTABLISHMENTS. ABDURRAHMAN AYDEMIR and MIKAL SKUTERUD* [FINAL DRAFT]

Why are Immigrants Underrepresented in Politics? Evidence From Sweden

Global Employment Trends for Women

Department of Economics The University of Melbourne \ : Labour Economics Semester 2, Course Outline

10/25/ million in

Transcription:

Discrimination Mariola Pytliková UniversityOstrava, CReAM, IZA, CCP and CELSI Info about lectures: http://home.cerge-ei.cz/munich/labor14/ Office hours: by appointment Contact: Email: Mariola.Pytlikova@vsb.cz Mobile: 739211312 Study Materials and Reading List Slides of the lectures (provided 1 day in advance or on the day of the class) All materials provided on: http://home.cerge-ei.cz/munich/labor14/ Compulsory: Borjas: Labour Economics; Chapter 9 Labor market discrimination. M. Bertrand and S. Mullainathan. (2004) Are Emily and Greg More Employable than Lakishaand Jamal? A Field Experiment in Labor Market Discrimination, AER 94 (Sept), pp. 991-1013. Optional: M. Bertrand. (2010) New Perspectives on Gender, Handbook of Labor Economics, vol. 4B, 1543-90. G. Becker (1957), The Economics of Discrimination. Hamermeshand Biddle. (1994)"Beauty and the Labor Market," AER 84 J. Altonjiand R. Blank. (1999) Race and Gender in the Labor Market. In Ashenfelter and Card, Handbook of Labor Economics, vol. 3C, 3143-259. Lang & Lehmann, 2012. "Racial Discrimination in the Labor Market: Theory and Empirics," JEL, vol. 50(4), pp. 959-1006 M. Niederleand L. Vesterlund. (2007) Do Women Shy Away from Competition? Do Men Compete to Much? QJE 122 (August), 1067-1101. Ehrenberg and Smith: Chapter 12, Gender, Race and the Ethnicity in the Labor Market 1

OUTLINE 1. Discrimination theory 2. Discrimination - empirics DISCRIMINATION: We know from previous lectures: Why do different workers get paid differently? Worker characteristics- differences in the attributes that different workers bring with them Job characteristics& Compensating wage differentials Discrimination Definition:Discriminationon the labourmarket exists if individuals who have identical productive characteristics are treated differently because of the demographic groups to which they belong. Examples: Men and women, natives and immigrants Women in their late 20s without children Immigrants with high education end up as taxi drivers 2

Types of discrimination Wagediscrimination: Present ifpricespaidby employersfor given productive characteristics are systematically different for different demographic groups, e.g. men and women Occupationaldiscrimination: Present ifindividualswith same educ. and productivepotential areworkingin lower-paying occupationsor with lower levels of responsibility than similar individuals from another demographic group, e.g. natives and immigrants, men and women etc. Occ. segregation is present if the distribution of occ. differs between demographic groups, e.g. men and women(female or male dominated occupations) It canbedifficultto distinguishbetweenoccupationalsegregation and occupational discrimination Occupational choices driven by preferences or discrimination? Reverse causality? Personal prejudice models (Becker, 1957) - Becker defines prejudice as a distaste/aversion for contact with other minority members. Employers discrimination; Discrimination of customers; Employee discrimination; Statistical discrimination (Phelps, 1972), Appearance discrimination (Hammermesh, 1998); Crowding model (Krueger, 1962), Dual labour markets. 3

Employers discrimination model (Becker, 1957): itsaysthatifemployeriswhiteandwhiteemployerhasachoicebetween black and white workers who are perfect substitutes, then a prejudice would make an employer to behave as if hiring a black worker is more expensive than it is. This is because a prejudiced employer would have to be compensated for interacting with blacks. =>a prejudiced employer would hire minority workers only if they receive a sufficiently lower wage than whites in order to make up for this discomfort => differences in wages between white and black workers depending on how strong employer s prejudice is. In a competitive market, non-discriminating firms will have higher profits thanthosefirmsthatdiscriminate-firmsthatdiscriminatedosoatacost to their profit. In the long run, we would expect that this discrimination would be eliminated as a result of competition. Employers discrimination model (Becker, 1957): Assumptions; Model; Implications: Criticism; 4

Employers discrimination model (Becker, 1957): Assumptions; Either the employers, customers, or employees have prejudicial tastes, i.e. do not associate with certain demographic groups Employer discrimination The more prejudiced an employer is against equally qualified womenor minoritiesin hiring, the more hewillactas the latter were less productive than preferred group e.g. white males, i.e. actualproductivitywillbediscounted(and the lower the wages of discriminized groups) Max. utility(satisfyingprejudicialpreferences) insteadof profit Employers discrimination model (Becker, 1957), Model: Market equilibrium for white males: MRP=WM MRP-d=WF => MRP=WF +d WF=WM-d MRP marginal revenue productivity, d extent to which this productivity is devaluated for minorities and women (discrimination factor), W wage, M, F male, female ->thus if the actual productivity of women and minorities is devalued by employers, workers in these groups must offer their services at lower wages than white males to compete for jobs. 5

Employers discrimination model (Becker, 1957) Implications - employment: Marginal revenue productunder discrimination Lost profit causedby discrimination MRP without discrimination(profitmaximizing employers) Remember: In equilibrium MRP=W Employers discrimination model (Becker, 1957), Implications wages: Relativelysmall supply of womenand minorities-> no wage differential Relativelybigsupply -> relative wages fall below 1 in equilibrium Market demandfor womenor minorities as fcn of relative wages 6

Employers discrimination model (Becker, 1957): Critique observed persistence of wage gaps over time. Some recent articles try to explain, imperfect markets, or e.g. Kerwin Kofi Charles and Jonathan Guryan(2008): Prejudice and Wages: Empirical Assessment of Becker s The Economics of Discrimination. Journal of Political Economy. Not only a story on discrimination, but also on segregation. Customers discrimination (Becker, 1957): Customer prejudice occurs when customers are willing to pay a higher price to buy goods and services from a favored worker group. The significantly lower wages of self-employed ethnic minority members are likely to be the result of customer prejudice. Customer discrimination raises product costs for those customers thatdiscriminateandlowersthewagesofthegroupsthatarethe targets of the discrimination. Consumer discrimination also leads to occupational segregation at least occupations or workplaces with employees that interact with customers. Discriminatory taste of consumers example: Customers preferto beservedby e.g. whitemales - Physicians, waiters, etc. 7

Employee discrimination (Becker, 1957): Employee discrimination occurs when workers avoid employment, in which they would interact with groups that are the target of their prejudice. In competitive markets, it would be profitable for firms to hire only the targets if such discrimination(due to their lower wages). Ifanemployeehasdiscriminatorypref.hewilltendtoquitoravoid employers who hire and promote on a non-discriminatory basis otherwiseheneedstobepaidawagepremium However, in many occupations, there are insufficient numbers of minority or female workers available to fill such positions. The majority status of white males in some of these occupations allows for the continued existence of this form of discrimination. Example: supervisors x workers Men with a female boss, sharing responsibility with a minority member Statistical discrimination (Phelps, 1972): Information problems The differences of treatment of groups by ethnicity, race, gender arise from average differences between the groups in the expected value of productivity (or in the reliability with which productivity can be predicted) => this leads employers to discriminate on the basis of that average; If group characteristics are factored into the hiring decision, statistical discrimination can happen even in the absence of personal prejudice E.g. individuals from a specific school has a good or bad reputation =>part of the screening problem => firms use info on individual and group characteristics for their hiring decision; If not a prejudice, the employers will show evidence of learning and will rely less on group affiliation ; Sheep-skin hypothesis; Example 8

Appearance discrimination (Biddle & Hammermesh, 1998, Hammermesh, ) Economics of Beauty Differences in success between good-looking and ugly people; Differences stronger in private compared to public sector; Crowding model (Krueger, 1962): One group imposes some barriers of entering into the group; In order to be realistic there must be certain barriers for some workers. Example 9

Dual labour markets: The labour market is divided into two non-competing sectors Primarysector: characterizedby high-wagejobs and stability Secondarysector:characterizedby low-wagejobs, unstable, low return to education, (and female dominated) Non-competitive forces Search-relatedmonopsony: Restrictedmobilitycausedby job searchcostsfor employees. Labour marketis not completelycompetitive-> lowerwageto individualswith high search costs. 10

DISCRIMINATION: Summary of the theory No onemodel is superiorto the othersin explainingthe facts All models agree that any persistence of labour market discrimination is the result of forces that are either noncompetitive or very slow to adjust to competitive forces Potential for government intervention to eliminate noncompetitive influences Mandate non-discrimination Force employers to hire a certain amount of minorities Ensure equal pay and equal opportunities for people of comparable productivity WHAT DOES THE EMPIRICAL EVIDENCE SAY? Methods & Evidence: 1. Measuring Wage discrimination: Oaxaca-Blinder decomposition 4 step procedure: decomposition into characteristics and coefficients. Characteristics observables; what people bring into labour market. Coefficients unexplained. Wage gap is decomposed into differences in characteristics and differences in coefficients; the last one measures discrimination. 11

WHAT DOES THE EMPIRICAL EVIDENCE SAY? Methods & Evidence: 1. Measuring Wage discrimination: Oaxaca-Blinder decomposition Measurement problems Data-intensive, a potential for omitted variables bias How to distinguish between labour market payoffs to productive char. and premarket choices about them? Empirical analyses show that labour market experience is very importantfactor explainingdifferences betweenmen and women s wages(within the same occ.) Women have less experience Women spayoffto oneextrayearof experienceis lowerthanfor men Frequency and timing of non-work may be important WHAT DOES THE EMPIRICAL EVIDENCE SAY? Methods & Evidence: 2. Measuring Occupational Segregation measures using matched employee-employer data, seee.g. study by Bayard, Hellerstein, Neumarkand Troske(2001): New Evidence on Sex Segregation and Sex Differences in Wages from Matched Employee-Employer Data ; similar studies on ethnic segregation. Measuring occupational segregation -Indexof dissimilarity: The percentage of the other gender/race/ethnicity that would have to change occupation in order to produce a completely even occupational distribution [0,100] men and women are equally distributed across occ. all occupations completely segregated The indexis somewherebetween50 and 70 accordingto empiricalstudies and it is declining No measure available for distinguishing between preference-based segregation and discrimination The declinein the indexis not the same as sayingthatdiscriminationis disappearing 12

WHAT DOES THE EMPIRICAL EVIDENCE SAY? Methods & Evidence: 3.Experiments Field experiments provide a direct evidence on discrimination, however, limited to discrimination in hiring practices only. audit and correspondence testing studies -carefully matched pairs of testers (from different gender and ethnic groups) apply for he same job and evidence on discrimination is inferred from the degree of cross-group asymmetry in the distribution of successes. WHAT DOES THE EMPIRICAL EVIDENCE SAY? Methods & Evidence: Some Experimental Evidence on discrimination in hiring: e.g. Magnus Carlsson and Dan-Olof Rooth (2008): Is It Your Foreign Name or Foreign Qualifications? An Experimental Study of Ethnic Discrimination in Hiring having foreign sounding name explains 77% of the total gap in the probability of being invited to an interview in Sweden, while having foreign qualifications explains only 23%. E.g. Bertrand and Mullainathan (AER2004): Are Emily and Greg more employable than Lakisha and Jamal? study race in the labor market by sending fictitious resumes to help-wanted ads in Boston and Chicago newspapers. To manipulate perceived race, resumes are randomly assigned African-American- or White-sounding names. White names receive 50 percent more callbacks for interviews. They conclude that differential treatment by race still appears to still be prominent in the U.S. labor market. 13

Empirical evidence from the Czech republic THE NEXT LECTURE: 4.2.2015 (Mariola Pytliková) 10:30-12:00 Migration I - trends, determinants 13.30-15.00 Migration II -selectivity, braindrain/braingain, integration& assimilation 14