Testing for Wage Discrimination in U.S. Manufacturing
In spite of the large literature on labor market discrimination, the quantity of solid evidence on discrimination is relatively limited. This is because evidence of discrimination is difficult to obtain. Two individuals may be treated equally, but this does not prove discrimination unless we can show that the differences in treatment were not justified by differences in productivity. The method most commonly used to identify wage discrimination, the Oaxaca decomposition, is flawed because any omitted variables that are correlated with gender will contribute to the unexplained portion of the wage gap, leading to an over- or under-estimation of wage discrimination. Audit studies provide more direct evidence of differential treatment, but are costly to carry out. Only a small number of studies attempt to measure worker productivity to see if wage differences are justified. This may be because the data needed to measure productivity are difficult to obtain. This paper tests for wage discrimination by gender and race by estimating relative productivity from 2002 Census of Manufacturing data linked to demographic information on workers from Longitudinal Employer-Household Dynamics (LEHD) files. Comparing the estimated productivity ratios to the observed wage ratios, I conclude that females and blacks face wage discrimination in US manufacturing.
|Date of creation:||Sep 2012|
|Date of revision:|
|Contact details of provider:|| Postal: 4600 Silver Hill Road, Washington, DC 20233|
Phone: (301) 763-6460
Fax: (301) 763-5935
Web page: http://www.census.gov/ces
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Goldin, Claudia, 1992.
"Understanding the Gender Gap: An Economic History of American Women,"
Oxford University Press, number 9780195072709, December.
- Claudia Goldin, 1990. "Understanding the Gender Gap: An Economic History of American Women," NBER Books, National Bureau of Economic Research, Inc, number gold90-1, June.
- Haegeland, T. & Klette, T.J., 1998.
"Do Higher Wages Reflect Higher Productivity? Education, Gender and Experience Premiums in a Matched Plant-Worker Data Set,"
24/1998, Oslo University, Department of Economics.
- Torbjørn Hægeland & Tor Jakob Klette, 1997. "Do Higher Wages Reflect Higher Productivity? Education, Gender and Experience Premiums in a Matched Plant-Worker Data Set," Discussion Papers 208, Statistics Norway, Research Department.
- Michael Fix & Raymond Struyk, 1993. "Clear and convincing evidence: Measurement of discrimination in america," Natural Field Experiments 00241, The Field Experiments Website.
- Seltzer, Andrew J., 2011. "Female salaries and careers in British banking, 1915–41," Explorations in Economic History, Elsevier, vol. 48(4), pages 461-477.
When requesting a correction, please mention this item's handle: RePEc:cen:wpaper:12-23. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Fariha Kamal)
If references are entirely missing, you can add them using this form.