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Wage Discrimination over the Business Cycle

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Author Info

  • Biddle, Jeff E.

    ()
    (Michigan State University)

  • Hamermesh, Daniel S.

    ()
    (University of Texas at Austin, Royal Holloway)

Abstract

Using CPS data from 1979-2009 we examine how cyclical downturns and industry-specific demand shocks affect wage differentials between white non-Hispanic men and women, Hispanics and non-Hispanic whites, and African-Americans and non-Hispanic whites. Women's relative earnings are harmed by negative shocks; the wage disadvantage of African-Americans drops with negative shocks, which have slight negative effects on Hispanics' relative wages. Negative shocks also increase the earnings disadvantage of bad-looking workers. A theory of job search suggests two opposite-signed mechanisms that affect these wage differentials. It suggests greater absolute effects among job-movers, which is verified using the longitudinal component of the CPS.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6445.

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Length: 33 pages
Date of creation: Mar 2012
Date of revision:
Publication status: published in: IZA Journal of Labor Policy, 2013, 2:7
Handle: RePEc:iza:izadps:dp6445

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Keywords: race; ethnicity; gender;

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  1. Blanchflower, D. & Oswald, A., 1989. "The Wage Curve," Papers 340, London School of Economics - Centre for Labour Economics.
  2. Richard B. Freeman, 1983. "Longitudinal Analyses of the Effects of Trade Unions," NBER Working Papers 1207, National Bureau of Economic Research, Inc.
  3. Asa Rosen, 2003. "Search, Bargaining, and Employer Discrimination," Journal of Labor Economics, University of Chicago Press, vol. 21(4), pages 807-830, October.
  4. Dustmann, Christian & Glitz, Albrecht & Vogel, Thorsten, 2009. "Employment, Wages, and the Economic Cycle: Differences between Immigrants and Natives," IZA Discussion Papers 4432, Institute for the Study of Labor (IZA).
  5. Peter Kuhn & Kailing Shen, 2013. "Gender Discrimination in Job Ads: Evidence from China," The Quarterly Journal of Economics, Oxford University Press, vol. 128(1), pages 287-336.
  6. 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.
  7. David G. Blanchflower & Andrew J. Oswald, 1992. "International Wage Curves," NBER Working Papers 4200, National Bureau of Economic Research, Inc.
    • David G. Blanchflower & Andrew Oswald, 1995. "International Wage Curves," NBER Chapters, in: Differences and Changes in Wage Structures, pages 145-174 National Bureau of Economic Research, Inc.
  8. Casey B. Mulligan & Yona Rubinstein, 2008. "Selection, Investment, and Women's Relative Wages Over Time," The Quarterly Journal of Economics, MIT Press, vol. 123(3), pages 1061-1110, August.
  9. David G. Blanchflower & Andrew J. Oswald, 1995. "An Introduction to the Wage Curve," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 153-167, Summer.
  10. Marston, Stephen T, 1985. "Two Views of the Geographic Distribution of Unemployment," The Quarterly Journal of Economics, MIT Press, vol. 100(1), pages 57-79, February.
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Cited by:
  1. David Neumark & Patrick Button, 2013. "Did Age Discrimination Protections Help Older Workers Weather the Great Recession?," Working Papers wp287, University of Michigan, Michigan Retirement Research Center.
  2. David W. Johnston & Grace Lordan, 2014. "When Work Disappears: Racial Prejudice and Recession Labour Market Penalties," CEP Discussion Papers dp1257, Centre for Economic Performance, LSE.
  3. Jahn, Elke J. & Rosholm, Michael, 2014. "Looking beyond the bridge: The effect of temporary agency employment on labor market outcomes," European Economic Review, Elsevier, vol. 65(C), pages 108-125.

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