IDEAS home Printed from https://ideas.repec.org/a/ier/iecrev/v51y2010i3p745-783.html
   My bibliography  Save this article

Gender Discrimination Estimation In A Search Model With Matching And Bargaining

Author

Listed:
  • Luca Flabbi

Abstract

This article develops a search model of the labor market with matching, bargaining, and employers' taste discrimination in which-under necessary but standard distributional assumption-it is possible to separately identify gender discrimination and unobserved productivity differences. The equilibrium shows that both prejudiced and unprejudiced employers wage discriminate. Maximum likelihood estimates on CPS data indicate that half of the employers are prejudiced, average female productivity is 6.5% lower, and two-third of the gender earning differential may be explained by prejudice. An affirmative action policy is implemented resulting in a redistribution of welfare from men to women at no cost for employers' welfare. Copyright (2010) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Suggested Citation

  • Luca Flabbi, 2010. "Gender Discrimination Estimation In A Search Model With Matching And Bargaining," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(3), pages 745-783, August.
    • Handle: RePEc:ier:iecrev:v:51:y:2010:i:3:p:745-783
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Moro, Andrea & Norman, Peter, 2003. "Affirmative action in a competitive economy," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 567-594, March.
    2. Welch, Finis, 1976. "Employment Quotas for Minorities," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 105-139, August.
    3. Zvi Eckstein & Kenneth I. Wolpin, 1995. "Duration to First Job and the Return to Schooling: Estimates from a Search-Matching Model," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 62(2), pages 263-286.
    4. Bollinger, Christopher R, 1998. "Measurement Error in the Current Population Survey: A Nonparametric Look," Journal of Labor Economics, University of Chicago Press, vol. 16(3), pages 576-594, July.
    5. Fabien Postel-Vinay & Jean-Marc Robin, 2002. "Equilibrium Wage Dispersion with Worker and Employer Heterogeneity," Econometrica, Econometric Society, vol. 70(6), pages 2295-2350, November.
    6. Luca Flabbi, 2010. "Gender Discrimination Estimation In A Search Model With Matching And Bargaining," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(3), pages 745-783, August.
    7. Pierre Cahuc & Fabien Postel-Vinay & Jean-Marc Robin, 2006. "Wage Bargaining with On-the-Job Search: Theory and Evidence," Econometrica, Econometric Society, vol. 74(2), pages 323-364, March.
    8. David Neumark & Roy J. Bank & Kyle D. Van Nort, 1996. "Sex Discrimination in Restaurant Hiring: An Audit Study," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(3), pages 915-941.
    9. Andrea Moro, 2003. "The Effect Of Statistical Discrimination On Black-White Wage Inequality: Estimating A Model With Multiple Equilibria," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(2), pages 467-500, May.
    10. James J. Heckman, 1998. "Detecting Discrimination," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 101-116, Spring.
    11. Asa Rosen, 2003. "Search, Bargaining, and Employer Discrimination," Journal of Labor Economics, University of Chicago Press, vol. 21(4), pages 807-830, October.
    12. Bowlus, Audra J, 1997. "A Search Interpretation of Male-Female Wage Differentials," Journal of Labor Economics, University of Chicago Press, vol. 15(4), pages 625-657, October.
    13. Ausubel, Lawrence M. & Cramton, Peter & Deneckere, Raymond J., 2002. "Bargaining with incomplete information," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 3, chapter 50, pages 1897-1945, Elsevier.
    14. repec:hal:spmain:info:hdl:2441/c8dmi8nm4pdjkuc9g8grh35j2 is not listed on IDEAS
    15. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-990, October.
    16. Abowd, John M. & Kramarz, Francis, 1999. "The analysis of labor markets using matched employer-employee data," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 40, pages 2629-2710, Elsevier.
    17. Altonji, Joseph G. & Blank, Rebecca M., 1999. "Race and gender in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 48, pages 3143-3259, Elsevier.
    18. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162, March.
    19. Stefania Albanesi & Claudia Olivetti, 2009. "Production, Market Production and the Gender Wage Gap: Incentives and Expectations," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 80-107, January.
    20. Bound, John & Brown, Charles & Mathiowetz, Nancy, 2001. "Measurement error in survey data," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 59, pages 3705-3843, Elsevier.
    21. Francine D. Blau & Lawrence M. Kahn, 2003. "Understanding International Differences in the Gender Pay Gap," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 106-144, January.
    22. Donohue, John J, III & Heckman, James, 1991. "Continuous versus Episodic Change: The Impact of Civil Rights Policy on the Economic Status of Blacks," Journal of Economic Literature, American Economic Association, vol. 29(4), pages 1603-1643, December.
    23. James Albrecht & Anders Bjorklund & Susan Vroman, 2003. "Is There a Glass Ceiling in Sweden?," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 145-177, January.
    24. repec:spo:wpmain:info:hdl:2441/dc0ckec3fcb29ms985085gkbp is not listed on IDEAS
    25. Fabien Postel-Vinay & Jean-Marc Robin, 2002. "Equilibrium Wage Dispersion with Worker and Employer Heterogeneity," Post-Print hal-03458567, HAL.
    26. Bowlus, Audra J & Kiefer, Nicholas M & Neumann, George R, 2001. "Equilibrium Search Models and the Transition from School to Work," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(2), pages 317-343, May.
    27. repec:spo:wpmain:info:hdl:2441/dc0ckec3fcb29ms9850c12h1p is not listed on IDEAS
    28. Francine D. Blau & Lawrence M. Kahn, 2000. "Gender Differences in Pay," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 75-99, Fall.
    29. Blau Francine D & Kahn Lawrence M, 2007. "The Gender Pay Gap," The Economists' Voice, De Gruyter, vol. 4(4), pages 1-6, June.
    30. Cecilia Rouse & Claudia Goldin, 2000. "Orchestrating Impartiality: The Impact of "Blind" Auditions on Female Musicians," American Economic Review, American Economic Association, vol. 90(4), pages 715-741, September.
    31. Borjas, George J & Bronars, Stephen G, 1989. "Consumer Discrimination and Self-employment," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 581-605, June.
    32. Flinn, Christopher, 2003. "Minimum Wage Effects on Labor Market Outcomes under Search with Bargaining," IZA Discussion Papers 949, Institute of Labor Economics (IZA).
    33. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
    34. Matthew S. Dey & Christopher J. Flinn, 2005. "An Equilibrium Model of Health Insurance Provision and Wage Determination," Econometrica, Econometric Society, vol. 73(2), pages 571-627, March.
    35. Sasaki, Masaru, 1999. "An Equilibrium Search Model with Coworker Discrimination," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 377-407, April.
    36. Gerard J. van den Berg & Geert Ridder, 1998. "An Empirical Equilibrium Search Model of the Labor Market," Econometrica, Econometric Society, vol. 66(5), pages 1183-1222, September.
    37. Zvi Eckstein & Kenneth I. Wolpin, 1999. "Estimating The Effect Of Racial Discrimination On First Job Wage Offers," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 384-392, August.
    38. Black, Dan A, 1995. "Discrimination in an Equilibrium Search Model," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 309-333, April.
    39. Larry Samuelson & George J. Mailath & Avner Shaked, 2000. "Endogenous Inequality in Integrated Labor Markets with Two-Sided Search," American Economic Review, American Economic Association, vol. 90(1), pages 46-72, March.
    40. repec:spo:wpmain:info:hdl:2441/c8dmi8nm4pdjkuc9g8grh35j2 is not listed on IDEAS
    41. Christopher J. Flinn, 2002. "Labour Market Structure and Inequality: A Comparison of Italy and the U.S," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(3), pages 611-645.
    42. repec:hal:spmain:info:hdl:2441/dc0ckec3fcb29ms9850c12h1p is not listed on IDEAS
    43. repec:hal:spmain:info:hdl:2441/dc0ckec3fcb29ms985085gkbp is not listed on IDEAS
    44. 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 257-273, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Giovanni Sulis, 2012. "Gender wage differentials in Italy: a structural estimation approach," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(1), pages 53-87, January.
    2. Andreas Hornstein & Per Krusell & Giovanni L. Violante, 2011. "Frictional Wage Dispersion in Search Models: A Quantitative Assessment," American Economic Review, American Economic Association, vol. 101(7), pages 2873-2898, December.
    3. Morchio, Iacopo & Moser, Christian, 2018. "The Gender Pay Gap: Micro Sources and Macro Consequences," MPRA Paper 99276, University Library of Munich, Germany, revised 24 Mar 2020.
    4. Morchio, Iacopo & Moser, Christian, 2018. "The Gender Pay Gap: Micro Sources and Macro Consequences," MPRA Paper 99276, University Library of Munich, Germany, revised 24 Mar 2020.
    5. Flabbi, Luca & Moro, Andrea, 2012. "The effect of job flexibility on female labor market outcomes: Estimates from a search and bargaining model," Journal of Econometrics, Elsevier, vol. 168(1), pages 81-95.
    6. Havet, Nathalie, 2004. "Écarts salariaux et disparités professionnelles entre sexes : développements théoriques et validité empirique," L'Actualité Economique, Société Canadienne de Science Economique, vol. 80(1), pages 5-39, Mars.
    7. Zheng Fang & Chris Sakellariou, 2013. "Discrimination in the Equilibrium Search Model with Wage-Tenure Contracts," Annals of Economics and Finance, Society for AEF, vol. 14(2), pages 451-480, November.
    8. Roland G. Fryer, Jr. & Devah Pager & Jörg L. Spenkuch, 2013. "Racial Disparities in Job Finding and Offered Wages," Journal of Law and Economics, University of Chicago Press, vol. 56(3), pages 633-689.
    9. John J. Donohue III, 2005. "The Law and Economics of Antidiscrimination Law," NBER Working Papers 11631, National Bureau of Economic Research, Inc.
    10. Flinn, C. & Todd, P. & Zhang, W., 2020. "Personality Traits, Job Search and the Gender Wage Gap," Cambridge Working Papers in Economics 2053, Faculty of Economics, University of Cambridge.
    11. repec:eee:labchp:v:3:y:1999:i:pc:p:3143-3259 is not listed on IDEAS
    12. Bruno Decreuse & Linas Tarasonis, 2021. "Statistical Discrimination in a Search Equilibrium Model: Racial Wage and Employment Disparities in the US," Annals of Economics and Statistics, GENES, issue 143, pages 105-136.
    13. Flabbi, Luca, 2010. "Prejudice and gender differentials in the US labor market in the last twenty years," Journal of Econometrics, Elsevier, vol. 156(1), pages 190-200, May.
    14. Akyol, Metin & Neugart, Michael & Pichler, Stefan, 2015. "A tradable employment quota," Labour Economics, Elsevier, vol. 36(C), pages 48-63.
    15. Borowczyk-Martins, Daniel & Bradley, Jake & Tarasonis, Linas, 2018. "Racial discrimination in the U.S. labor market: Employment and wage differentials by skill," Labour Economics, Elsevier, vol. 50(C), pages 45-66.
    16. Rune Vejlin & Gregory F. Veramendi, 2023. "Sufficient statistics for frictional wage dispersion and growth," Quantitative Economics, Econometric Society, vol. 14(3), pages 935-979, July.
    17. Violante, Giovanni & Hornstein, Andreas, 2006. "Frictional Wage Dispersion in Search Models: A Quantitative Approach," CEPR Discussion Papers 5935, C.E.P.R. Discussion Papers.
    18. Bruno Decreuse & Linas Tarasonis, 2016. "Statistical Discrimination in a Search Equilibrium Model: Racial Wage and Employment Disparities in the US," Working Papers halshs-01327961, HAL.
    19. Jonathan Lain, 2019. "Discrimination in a search and matching model with self-employment," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 9(1), pages 1-35, December.
    20. Xiao, Pengpeng, 2021. "Wage and Employment Discrimination by Gender in Labor Market Equilibrium," Working Papers 144, VATT Institute for Economic Research.
    21. Kunze, Astrid & Troske, Kenneth R., 2012. "Life-cycle patterns in male/female differences in job search," Labour Economics, Elsevier, vol. 19(2), pages 176-185.

    More about this item

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • J7 - Labor and Demographic Economics - - Labor Discrimination
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ier:iecrev:v:51:y:2010:i:3:p:745-783. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley-Blackwell Digital Licensing or the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/deupaus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.