copyright © 2009 pearson education, inc. chapter 12 gender, race, and ethnicity in the labor market

Chapter 12

Gender, Race, and Ethnicity in the Labor Market

Table 12.1: Shares of the Civilian Labor Force for Major Demographic Groups:

1984, 1994, 2004, 2014

Figure 12.1: Mean Earnings as a Percentage of White Male Earnings, Various

Demographic Groups, Full-Time Workers over 24 Years Old, 2005

Why Do Women Earn Less Than Men?

Age and education account for some of the difference

Older women have less education than their male counterparts

Female/male earning ratios tend to fall with age

Table 12.2: Female Earnings as a Percentage of Male Earnings, by Age and

Education, Full-Time Workers, 2005

Occupational Distribution

Women tend to be overrepresented in low-paying jobs and underrepresented in high-paying jobs

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

Hours and Experience

Within the same occupations, women work fewer hours and have less work experience than their Male counterparts

Factors That Can’t be Measured

Unobservable productivity characteristics

Discrimination in the labor market

Types Of Labor Market Discrimination

1. Wage Discrimination

2. Occupational Discrimination

Measuring Occupational Segregation

Does it reflect free choice, labor market discrimination, or pre-market discrimination?

Measuring Wage Discrimination

How much women would earn if their productive characteristics were exactly the same as men?

How would the hypothetical earnings compare with the actual earnings of men?

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 + BfSf

where:

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

Measuring the Impact of Discrimination on the Wage

Dollars

Men’s Earnings Function

Women’s Earnings Function

Schooling sF s

Earning Differentials Between Black And White Americans

Black men have lower LFPRs and higher unemployment rates than white men

Black workers are more likely than white workers to be laid off in a recession

Table 12.4: Employment Ratios, Labor Force Participation Rates, and Unemployment Rates, by Race and Gender,* 1970-2005

Earning Differentials By Ethnicity

Earnings and Educational Attainment Vary Widely Across Ethnic Groups

Language Proficiency Is an Important Variable in Explaining the Wage Gap

Between Hispanics and Non Hispanics

Table 12.5: Male Earnings Differences, by Ancestry, 1990

Theories of Market Discrimination

Personal Prejudice - Employer, Employee, and Customer

Statistical Discrimination

Non Competitive Forces Models

Personal Prejudice Models

1. Biased Employer – Acts as if Wf = Wf +d

2. Biased Employee – Acts as if Wm = Wm -d

3. Biased Customer – Acts as if P = P +d

Where d is the Discrimination Variable

Personal Prejudice Model - Employer

Assume: 1. MRPm = MRPf 2. A competitive labor market 3. Wm>Wf

Under these conditions, a nonbiased employer will hire females up to the point where Wf = MRPf

The biased employer will hire females up to the point where Wf + d = MRPf, and d is a measure of discrimination

Figure 12.2: Equilibrium Employment of Women or Minorities in

Firms that Discriminate

Figure 12.3: Market Demand for Women or Minorities as a Function of Relative Wages

Figure 12.4: Effects on Relative Wages of an Increased Number of

Nondiscriminatory Employers

Figure 12.5: Effects on Relative Wages of a Decline in the Discriminatory

Preferences of Employers

Personal Prejudice Model - Customer

If customers prefer to be served by white males:

1. Occupational segregation and discrimination may occur, or women will have to accept

lower pay or be better qualified than men to work in those jobs.

2. Firms that cater to prejudiced customers will pay higher wages and charge higher prices.

Personal Prejudice Model - Employee

If white male employees are discriminatory:

1. Non discriminating firms will have to pay them a compensating differential, or,

2. Segregate the workplace or segregate by title

Statistical Discrimination

An employer may unknowingly discriminate if he uses group characteristics to screen job applicants

Even if the use of group characteristics leads to correct hiring decisions on average, it will

discriminate against members of the group who are atypical

Federal Programs to End Discrimination

Equal Wage Act of 1963 - What it didn’t do.

Title 7 of the Civil Rights Act of 1964 - What it remedied.

Disparate Treatment Disparate Impact Comparable Worth

Federal Contract Compliance Program and Affirmative Action

Example 12.4: Comparable Worth and the University

The Market for Computer Science and English Professors

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)

copyright © 2009 pearson education, inc. chapter 12 gender, race, and ethnicity in the labor market

pearson education

education account

age slide

jobs slide

discrimination variable

labor market slide

recession slide

female earnings

Documents

geography of race & ethnicity defining –race –ethnicity...

race ethnicity

ethnicity and race

ethnicity and race 9

ethnicity, race, gender & class ethnicity and race

truth: race and ethnicity - wordpress.com · another...

ppt race, ethnicity, representation

chapter 7 ethnicity. what is ethnicity? what is ethnicity?...

race and ethnicity chapter ten. 2 outline race and ethnicity...

race and ethnicity -...

3. race and ethnicity

ethnicity & race race is/race ain’t from safari montage

chapter 9: race and ethnicity. objectives (slide 1 of 3) 9.1...

race ethnicity and education

gender, race, and ethnicity

ethnicity and race. chapter outline ethnic groups &...

© 2014 pearson education, inc. chapter 5- race, ethnicity,...

health equity & race and ethnicity data: how race and...

1 family sociology race, ethnicity, & families. 2 race,...

medicare race/ethnicity data