The Structure of Labour Markets and Low Pay for Women

Early analyses of discrimination stemming from Gary Becker’s The Economics of Discrimination, (1957) emphasised discriminatory behaviour as a consequence of the tastes or aversions to particular groups of various parties (including employers, employees and customers). Since many females are employed in areas where contact with the public is important (e. g. retail distribution) it is unlikely that women as a group suffer much from customer discrimination. In examining the extent to which other forms of discrimination depress the pay of women relative to men one would place the emphasis on employer rather than employee (or co-worker) discrimination since theory suggests that the latter will give rise to segregation rather than wage differences.1 However, the ‘crowding hypothesis’ referred to in Chapter 2 suggests that segregation itself could give rise to wage differences since the enforced abundance of supply of women in certain sectors will lower marginal productivity there and depress the wage rate. Yet employer discrimination or collusion with male employees and their representatives is implied here, for otherwise we would expect demand for labour to increase in the crowded sector which is now cheaper than before. Recent work on the dual labour market (DLM) is particularly relevant in this context.