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The limits of the wage impact of discrimination

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Listed:
  • Elizabeth Becker

    (Analysis Group, 15th Floor, 10 Rockefeller Plaza, New York, NY 10020, USA)

  • Cotton M. Lindsay

    (Department of Economics, Clemson University, Clemson, SC 29634, USA)

Abstract

In spite of almost 40 years of active enforcement efforts by the EEOC, as well as the strong intervention by the plaintiff bar, the most popular benchmark by which we measure the influence of prejudice on wages paid to female and minority workers has changed very little. This paper maintains that to a large extent this seeming immunity of discriminatory wage gaps to the legal remedies provided by Title VII results from the mismeasurement of those effects. An alternative to the standard Oaxaca decomposition of the wage gap is offered which allows us to put plausible ranges around the true impact of antidiscrimination laws. Not only does this reduce the residual impact of the discrimination that appears to withstand Title VII remedies, it also suggests that the pre-Title VII impact of discrimination on wages accounted for little of the gap observed at the time of its passage. Copyright © 2005 John Wiley & Sons, Ltd.

Suggested Citation

  • Elizabeth Becker & Cotton M. Lindsay, 2005. "The limits of the wage impact of discrimination," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 26(8), pages 513-525.
  • Handle: RePEc:wly:mgtdec:v:26:y:2005:i:8:p:513-525
    DOI: 10.1002/mde.1238
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    File URL: http://hdl.handle.net/10.1002/mde.1238
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    References listed on IDEAS

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    1. Mincer, Jacob & Polachek, Solomon, 1974. "Family Investment in Human Capital: Earnings of Women," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 76-108, Part II, .
    2. 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.
    3. Trejo, Stephen J, 1991. "The Effects of Overtime Pay Regulation on Worker Compensation," American Economic Review, American Economic Association, vol. 81(4), pages 719-740, September.
    4. Heckman, James J & Payner, Brook S, 1989. "Determining the Impact of Federal Antidiscrimination Policy on the Economic Status of Blacks: A Study of South Carolina," American Economic Review, American Economic Association, vol. 79(1), pages 138-177, March.
    5. Ashenfelter, Orley & Smith, Robert S, 1979. "Compliance with the Minimum Wage Law," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 333-350, April.
    6. Kenneth A. Couch & Mary Daly, 2003. "The Improving Relative Status of Black Men," Journal of Income Distribution, Journal of Income Distribution, vol. 12(3-4), pages 4-4, September.
    7. Blau, Francine D & Ferber, Marianne A, 1987. "Discrimination: Empirical Evidence from the United States," American Economic Review, American Economic Association, vol. 77(2), pages 316-320, May.
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