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Macroeconomic consequences of gender discrimination: a preliminary approach (refereed paper)

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  • Melchor Fernandez
  • Yolanda Pena-Boquete

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Abstract

Although the degree of gender wage discrimination has been estimated many times, its effects on the economy have not been too much studied, neither theoretically nor empirically. Consequently, in this paper we attempt to cover the existent void in this topic. First, we establish a theoretically framework of the macroeconomic consequences of gender discrimination and second, we attempt to check these results empirically. The existence of a degree of discrimination means that there is a wage differential in which employer prefer to hire less productive workers instead of discriminated workers. Thus, on one hand, the employment level of discriminated workers would be lower than the neoclassic equilibrium. On the other hand, the cost of producing a unit of product would be higher than the cost of producing without discrimination. As a result, both the product by worker (productivity) and the female employment rate (discriminated group) would be lower. If we aggregate these microeconomic effects we should obtain macroeconomic effects in both productivity and employment. In order to check these effects of discrimination we analyse the correlation in the growth of discrimination and the variables possibly affected: productivity and employment. Using data of gender discrimination for Spanish regions we found a negative and significant relationship between discrimination and productivity. Effects on employment are more difficult to see since the growth of the degree of gender wage discrimination causes a change in the allocation of resources. Thus, we find the effect in the female employment rate relative to men and we do not find it in the female employment rate.

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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa10p1066.

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Date of creation: Sep 2011
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Handle: RePEc:wiw:wiwrsa:ersa10p1066

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  1. 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.
  2. Burdett, Kenneth & Mortensen, Dale T, 1998. "Wage Differentials, Employer Size, and Unemployment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 257-73, May.
  3. Ramon Gomez-Salvador & Alberto Musso & Marc Stocker & Jarkko Turunen, 2006. "Labour productivity developments in the euro area," Occasional Paper Series 53, European Central Bank.
  4. Robert J. Barro, 2012. "Inflation and Economic Growth," CEMA Working Papers 568, China Economics and Management Academy, Central University of Finance and Economics.
  5. Spielmann, Christian & Busse, Matthias, 2005. "Gender Inequality and Trade," Proceedings of the German Development Economics Conference, Kiel 2005 8, Verein für Socialpolitik, Research Committee Development Economics.
  6. Berta Esteve-Volart, 2004. "Gender Discrimination and Growth: Theory and Evidence from India," STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers 42, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  7. Baldwin, Marjorie & Johnson, William G., 1992. "A test of the measures of non-discriminatory wages used to study wage discrimination," Economics Letters, Elsevier, vol. 39(2), pages 223-227, June.
  8. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
  9. Krugman, Paul R, 1996. "Making Sense of the Competitiveness Debate," Oxford Review of Economic Policy, Oxford University Press, vol. 12(3), pages 17-25, Autumn.
  10. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-61, September.
  11. Berta Esteve-Volart, 2000. "Sex Discrimination and Growth," IMF Working Papers 00/84, International Monetary Fund.
  12. Seguino, Stephanie, 2000. "Gender Inequality and Economic Growth: A Cross-Country Analysis," World Development, Elsevier, vol. 28(7), pages 1211-1230, July.
  13. Polachek,Solomon W. & Siebert,W. Stanley, 1993. "The Economics of Earnings," Cambridge Books, Cambridge University Press, number 9780521367288, April.
  14. Yolanda Pena-Boquete, 2009. "A comparative analysis of the evolution of gender wage discrimination: Spain vs. Galicia," Papers in Regional Science, Wiley Blackwell, vol. 88(1), pages 161-180, 03.
  15. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
  16. Seguino, Stephanie, 2002. "Gender, quality of life, and growth in Asia 1070 to 1990," MPRA Paper 6547, University Library of Munich, Germany.
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