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Statistical Discrimination, Occupational Sorting, and Career Opportunities

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Abstract

Statistical discrimination is an important determinant of earning gaps. Yet, little is known about its consequences on wage determination. This paper studies the effects of statistical discrimination against female workers due to their weaker labor force attachment. We first analyze the equilibrium wage outcome using a screening model. We then test whether statistical discrimination exists by extending the employer learning model using Japanese data. We find evidence for statistical discrimination against women based on average labor force attachment. Last, we calibrate the model and results, which indicate that decreasing child-care subsidies might improve total welfare in a cost effective manner. JEL Classification: J24, J31, J63, J71

Suggested Citation

  • Hsuan-Chih (Luke) Lin & Atsuko Tanaka, 2016. "Statistical Discrimination, Occupational Sorting, and Career Opportunities," IEAS Working Paper : academic research 16-A014, Institute of Economics, Academia Sinica, Taipei, Taiwan, revised Dec 2016.
    • Handle: RePEc:sin:wpaper:16-a014
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    More about this item

    Keywords

    Statistical Discrimination; Efficiency Wages; Screening Mechanism; Wage Contracts;
    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
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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