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Wage Discrimination and Population Composition

Author

Listed:
  • Thanos Mergoupis

    (University of Bath)

  • Shasi Nandeibam

    (University of Bath)

Abstract

In the context of wage discrimination the effects of a changing population composition on wages have been analysed only when labour supplies are fixed. This note introduces variable supplies, with labour supply varying at the extensive margin. Contrary to the case of fixed labour supplies, we find that wages of the discriminated and the non-discriminated group can change in the same direction. The effects on the wage ratio however, are in the same direction as in the case of fixed supplies. The reason that wage levels can change in the same direction is that in addition to the relative labour supply effect, an aggregate labour supply effect can be of the opposite sign and dominate the relative labour supply effect.

Suggested Citation

  • Thanos Mergoupis & Shasi Nandeibam, 2011. "Wage Discrimination and Population Composition," Department of Economics Working Papers 9/11, University of Bath, Department of Economics.
    • Handle: RePEc:eid:wpaper:37932
    as

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    References listed on IDEAS

    as
    1. Heckman, James J, 1993. "What Has Been Learned about Labor Supply in the Past Twenty Years?," American Economic Review, American Economic Association, vol. 83(2), pages 116-121, May.
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    3. 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.
    4. Abowd, John M & Killingsworth, Mark R, 1984. "Do Minority-White Unemployment Differences Really Exist?," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(1), pages 64-72, January.
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