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Statistical Discrimination and Gender Wage Gap: A Model

Author

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  • Xia Li

    (School of Economics, Shanghai University of Finance and Economics, Shanghai 200433, China)

Abstract

In this paper, I extend the model in Coate and Loury (CL) (1993) to show how statistical discrimination by employers can help create gender wage gap for men and women with equal earning potentials. Given that employers do not perfectly observe a worker¡¯s skill type and partly rely on the average skills level of his (her) peers for inference purpose, employers¡¯ differential treatment of male and female workers can create different skill-investment incentives for them, which in turn justify employers¡¯ discrimination in the first place. The second result of this paper which is not possible within the original CL framework is that I point to the possibility that there exist circumstances under which the gender wage gap can not be eliminated without the formerly advantaged sex being negatively affected.

Suggested Citation

  • Xia Li, 2012. "Statistical Discrimination and Gender Wage Gap: A Model," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 7(2), pages 286-304, June.
    • Handle: RePEc:fec:journl:v:7:y:2012:i:2:p:286-304
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    File URL: http://journal.hep.com.cn/fec/EN/10.3868/s060-001-012-0013-0
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    Cited by:

    1. Abrell, Jan & Rausch, Sebastian, 2016. "Cross-country electricity trade, renewable energy and European transmission infrastructure policy," Journal of Environmental Economics and Management, Elsevier, vol. 79(C), pages 87-113.
    2. Fang, Xiande & Li, Dingkun, 2013. "Solar photovoltaic and thermal technology and applications in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 23(C), pages 330-340.

    More about this item

    Keywords

    gender wage gap; home production; statistical discrimination;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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