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Gender Discrimination Estimation in a Search Model with Matching and Bargaining

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Author Info
Luca Flabbi () (Department of Economics, Georgetown University)

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Abstract

Gender wage differentials, conditional on observed productivity characteristics, have been considered a possible indication of prejudice against women in the labor market. However, there is no conclusive evidence on whether these differentials are due to labor market discrimination or to unobserved productivity differences. The objective of this paper is to solve the identification problem by developing a search model of the labor market with matching, bargaining and employer's taste discrimination. In equilibrium all types of employers wage discriminate women: prejudiced employers because of preference and unprejudiced employers because of spillover effects that worsen the bargaining position of women. Estimation is performed by maximum likelihood on Current Population Survey data for the year 1995. Results indicate that the productivity of women is 6.5% lower than the productivity of men and that about half of the employers are prejudiced against women. Two policy experiments are implemented using the estimated parameters: an equal pay policy and an affirmative action policy.Classification-JEL:C73,D72, D74

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Paper provided by Georgetown University, Department of Economics in its series Working Papers with number gueconwpa~04-04-08.

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Handle: RePEc:geo:guwopa:gueconwpa~04-04-08

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Postal: Georgetown University Department of Economics Washington, DC 20057-1036
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Related research
Keywords: Discrimination; Search Models; Maximum Likelihood Estimation;

Other versions of this item:

Find related papers by JEL classification:
C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
J7 - Labor and Demographic Economics - - Labor Discrimination
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
  3. Black, Dan A, 1995. "Discrimination in an Equilibrium Search Model," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 309-33, April. [Downloadable!] (restricted)
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    Other versions:
  5. Welch, Finis, 1976. "Employment Quotas for Minorities," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages S105-39, August. [Downloadable!] (restricted)
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    Other versions:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Waisman, Gisela & Larsen, Birthe, 2008. "Who is Hurt by Discimination?," SULCIS Working Papers 2008:4, Stockholm University Linnaeus Center for Integration Studies - SULCIS. [Downloadable!]
  2. Luca Flabbi, 2007. "Prejudice and Gender Differentials in the U.S. Labor Market in the Last Twenty Years," Carlo Alberto Notebooks 57, Collegio Carlo Alberto. [Downloadable!]
    Other versions:
  3. Flabbi, Luca & Leonardi, Marco, 2008. "Sources of Earnings Instability: Estimates from an On-the-Job Search Model of the U.S. Labor Market," IZA Discussion Papers 3387, Institute for the Study of Labor (IZA). [Downloadable!]
  4. Giovanni Sulis, 2007. "Gender Wage Differentials in Italy: a Structural Estimation Approach," Working Paper CRENoS 200715, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia. [Downloadable!]
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