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Prejudice and Gender Differentials in the U.S. Labor Market in the Last Twenty Years

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Abstract

Earnings differentials between men and women have experienced a stable convergence during the 1980s, following a process started in the late 1970s. However, in the 1990s the convergence has almost stopped. The first objective of the paper is to evaluate if discrimination, defined as explicit prejudice, may have a role in explaining this slowdown in the converge. The second objective is to assess whether the prediction of a decrease in the proportion of prejudiced employers implied by the Becker's model of taste discrimination is taking place and if so at what speed. These objectives are achieved by developing and estimating a search model of the labor market with matching, bargaining, employer's prejudice and worker's participation decisions. The results show that the proportion of prejudiced employers is estimated to be decreasing at an increasing speed, going from about 69% in 1985 to about 32% in 2005. Therefore prejudice does not seem a relevant factor in explaining the slower convergence between male and female earnings in the 1990s. The results are consistent with the Becker's model of taste discrimination if one is willing to assume a very slow adjustment process. Classification-JEL Codes: C51; J7; J64

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Bibliographic Info

Paper provided by Georgetown University, Department of Economics in its series Working Papers with number gueconwpa~07-07-07.

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Date of creation: 07 Jul 2007
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Handle: RePEc:geo:guwopa:gueconwpa~07-07-07

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Postal: Marcia Suss Administrative Officer Georgetown University Department of Economics Washington, DC 20057-1036
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Keywords: gender differentials; discrimination; search models; maximum likelihood estimation; structural estimation;

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References

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  1. C. J. Flinn, . "Interpreting Minimum Wage Effects on Wage Distributions: A Cautionary Tale," Institute for Research on Poverty Discussion Papers 1214-00, University of Wisconsin Institute for Research on Poverty.
  2. Luca Flabbi, 2004. "Gender Discrimination Estimation in a Search Model with Matching and Bargaining," 2004 Meeting Papers 367, Society for Economic Dynamics.
  3. Thomas Lemieux & Nicole M. Fortin, 2000. "Are Women's Wage Gains Men's Losses? A Distributional Test," American Economic Review, American Economic Association, vol. 90(2), pages 456-460, May.
  4. Audra J. Bowlus & Zvi Eckstein, 2002. "Discrimination and Skill Differences in an Equilibrium Search Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1309-1345, November.
  5. Francine D. Blau & Lawrence M. Kahn, 2004. "The US Gender Pay Gap in the 1990s: Slowing Convergence," NBER Working Papers 10853, National Bureau of Economic Research, Inc.
  6. Zvi Eckstein & Éva Nagypál, 2004. "The evolution of U.S. earnings inequality: 1961?2002," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Dec, pages 10-29.
  7. Flinn, C. & Heckman, J., 1982. "New methods for analyzing structural models of labor force dynamics," Journal of Econometrics, Elsevier, vol. 18(1), pages 115-168, January.
  8. James J. Heckman, 1998. "Detecting Discrimination," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 101-116, Spring.
  9. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226041162, September.
  10. Bowlus, A.J., 1995. "A Search Interpretation of Male-Female Wage Differentials," UWO Department of Economics Working Papers 9504, University of Western Ontario, Department of Economics.
  11. Eckstein, Z. & Wolpin, K.I., 1992. "Duration to First Job and the Return to Schooling : Estimates form a Search -Matching Model," Papers 13-92, Tel Aviv.
  12. Flinn, Christopher, 2003. "Minimum Wage Effects on Labor Market Outcomes under Search with Bargaining," IZA Discussion Papers 949, Institute for the Study of Labor (IZA).
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Cited by:
  1. Mariagiovanna Baccara & Allan Collard-Wexler & Leonardo Felli & Leeat Yariv, 2010. "Gender and Racial Biases: Evidence from Child Adoption," CESifo Working Paper Series 2921, CESifo Group Munich.
  2. Giovanni Sulis, 2012. "Gender wage differentials in Italy: a structural estimation approach," Journal of Population Economics, Springer, vol. 25(1), pages 53-87, January.

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