Presentation on theme: "Gender, Race, and Ethnicity in the Labor Market"— Presentation transcript:
1 Gender, Race, and Ethnicity in the Labor Market Chapter 12Gender, Race, and Ethnicity in the Labor Market
2 Table 12.1: Shares of the Civilian Labor Force for Major Demographic Groups: 1984, 1994, 2004, 2014
3 Figure 12.1: Mean Earnings as a Percentage of White Male Earnings, Various Demographic Groups, Full-Time Workers over 24 Years Old, 2005
4 Why Do Women Earn Less Than Men? Age and education account for some of the differenceOlder women have less education than their male counterpartsFemale/male earning ratios tend to fall with age
5 Table 12.2: Female Earnings as a Percentage of Male Earnings, by Age and Education, Full-Time Workers, 2005
6 Why Do Women Earn Less Than Men? Occupational Distribution Women tend to be overrepresented in low-payingjobs and underrepresented in high-paying jobs
7 Table 12.3: Female/Male Earnings Ratios and Percentages of Female Jobholders, Full-Time Wage and Salary Workers, by Selected High- and Low-Paying Occupations, 2005
8 Why Do Women Earn Less Than Men? Hours and Experience Within the same occupations, women work fewerhours and have less work experience than theirMale counterparts
9 Why Do Women Earn Less Than Men? Factors That Can’t be MeasuredUnobservable productivity characteristicsDiscrimination in the labor market
10 Types Of Labor Market Discrimination Wage DiscriminationOccupational Discrimination
11 Measuring Occupational Segregation Does it reflect free choice, labor marketdiscrimination, or pre-marketdiscrimination?
12 Measuring Wage Discrimination How much women would earn if their productivecharacteristics were exactly the same as men?How would the hypothetical earnings compare withthe actual earnings of men?
13 The Oaxaca Decomposition Assume that:1. Only one variable, education affects earnings.2. The male earnings function is Wm = Am + BmSm3. The female earning function is Wf = Af + BfSfwhere:Wm = male earnings, Wf = female earningsAm and Af are intercepts (constants)Bm and Bf are coefficients that tell how earnings increase withone more year of schooling
14 Measuring the Impact of Discrimination on the Wage DollarsMen’s Earnings FunctionWomen’s Earnings FunctionSchoolingsFsMwMwFMwFF
15 Earning Differentials Between Black And White Americans Black men have lower LFPRs and higherunemployment rates than white menBlack workers are more likely than white workers tobe laid off in a recession
16 Table 12.4: Employment Ratios, Labor Force Participation Rates, and Unemployment Rates, by Race and Gender,*
17 Earning Differentials By Ethnicity Earnings and Educational Attainment Vary Widely Across Ethnic GroupsLanguage Proficiency Is an ImportantVariable in Explaining the Wage GapBetween Hispanics and Non Hispanics
18 Table 12.5: Male Earnings Differences, by Ancestry, 1990
19 Theories of Market Discrimination Personal Prejudice - Employer, Employee,and CustomerStatistical DiscriminationNon Competitive Forces Models
20 Personal Prejudice Models 1. Biased Employer – Acts as if Wf = Wf +d 2. Biased Employee – Acts as ifWm = Wm -d3. Biased Customer – Acts as if P = P +dWhere d is the Discrimination Variable
21 Personal Prejudice Model - Employer Assume: 1. MRPm = MRPf 2. A competitive labor market3. Wm>WfUnder these conditions, a nonbiased employer will hirefemales up to the point where Wf = MRPfThe biased employer will hire females up to the pointwhere Wf + d = MRPf, and d is a measure ofdiscrimination
22 Figure 12.2: Equilibrium Employment of Women or Minorities in Firms that Discriminate
23 Figure 12.3: Market Demand for Women or Minorities as a Function of Relative Wages
24 Figure 12.4: Effects on Relative Wages of an Increased Number of Nondiscriminatory Employers
25 Figure 12.5: Effects on Relative Wages of a Decline in the Discriminatory Preferences of Employers
26 Personal Prejudice Model - Customer If customers prefer to be served by whitemales:Occupational segregation and discrimination may occur, or women will have to acceptlower pay or be better qualified than men to work in those jobs.2. Firms that cater to prejudiced customerswill pay higher wages and charge higherprices.
27 Personal Prejudice Model - Employee If white male employees are discriminatory:Non discriminating firms will have to paythem a compensating differential, or,2. Segregate the workplace or segregate bytitle
28 Statistical Discrimination An employer may unknowingly discriminate if heuses group characteristics to screen jobapplicantsEven if the use of group characteristics leads to correct hiring decisions on average, it willdiscriminate against members of the group whoare atypical
29 Federal Programs to End Discrimination Equal Wage Act of What it didn’t do.Title 7 of the Civil Rights Act of What it remedied.Disparate TreatmentDisparate ImpactComparable WorthFederal Contract Compliance Program and Affirmative Action
30 Example 12.4: Comparable Worth and the University The Market for Computer Science and English Professors
31 Table 12.6: Change in the Racial Composition of a 1,600-Person Job Group with Nondiscriminatory Hiring from a Pool That Is 12% Black (20% yearly turnover rate)
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