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Indirect Re–employment Wage Discrimination

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  • Kostas G. Mavromaras

Abstract

This paper looks at unemployed individuals and investigates wage differences generated by re–employment selection. It shows that discriminatory re–employment selection can result, indirectly, in discriminatory re–employment pay. A Heckman two–stage selection model is combined with an extension of Gomulka–Stern non–linear decompositions to explain how re–employment selection generates indirect discrimination. The paper uses data from pre–unification Germany in the late 1980s and finds that female human capital suffers more from unemployment and that the market is harsher to males for becoming unemployed. New policies should encourage a regime where the hiring process is more transparent and hiring decisions are monitored on a regular basis.

Suggested Citation

  • Kostas G. Mavromaras, 2003. "Indirect Re–employment Wage Discrimination," Bulletin of Economic Research, Wiley Blackwell, vol. 55(1), pages 53-89, January.
    • Handle: RePEc:bla:buecrs:v:55:y:2003:i:1:p:53-89
    DOI: 10.1111/1467-8586.00162
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    References listed on IDEAS

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    1. Kostas G. Mavromaras & Helmut Rudolph, 1998. "Temporary Separations and Firm Size in the German Labour Market," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(2), pages 215-225, May.
    2. Dolton, Peter J & Mavromaras, Kostas G, 1994. "Intergenerational Occupational Choice Comparisons: The Case of Teachers in the UK," Economic Journal, Royal Economic Society, vol. 104(425), pages 841-863, July.
    3. Mavromaras, Kostas G & Rudolph, Helmut, 1998. "Temporary Separations and Firm Size in the German Labour Market," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(2), pages 215-225, May.
    4. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
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    1. Hübler, Olaf, 2003. "Geschlechtsspezifische Lohnunterschiede (Gender-specific wage differentials)," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 36(4), pages 539-559.
    2. Liebig, Stefan & Hense, Andrea, 2007. "Bedingungen und Folgen betriebsbedingter Entlassungen mit anschließender Wiederbeschäftigung in Deutschland," Duisburger Beiträge zur soziologischen Forschung 4/2007, University of Duisburg-Essen, Institute of Sociology.
    3. Hübler, Olaf, 2003. "Geschlechtsspezifische Lohnunterschiede (Gender-specific wage differentials)," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 36(4), pages 539-559.

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