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Prejudice and Gender Differentials in the U.S. Labor Market in the Last Twenty Years

Earnings differentials between men and women have experienced a stable convergence during the 1980s, following a process started in the late 1970s. However, in the 1990s the convergence has almost stopped. The first objective of the paper is to evaluate if discrimination, defined as explicit prejudice, may have a role in explaining this slowdown in the converge. The second objective is to assess whether the prediction of a decrease in the proportion of prejudiced employers implied by the Becker's model of taste discrimination is taking place and if so at what speed. These objectives are achieved by developing and estimating a search model of the labor market with matching, bargaining, employer's prejudice and worker's participation decisions. The results show that the proportion of prejudiced employers is estimated to be decreasing at an increasing speed, going from about 69% in 1985 to about 32% in 2005. Therefore prejudice does not seem a relevant factor in explaining the slower convergence between male and female earnings in the 1990s. The results are consistent with the Becker's model of taste discrimination if one is willing to assume a very slow adjustment process.

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Paper provided by Georgetown University, Department of Economics in its series Working Papers with number gueconwpa~07-07-07.

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Date of creation: 07 Jul 2007
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Handle: RePEc:geo:guwopa:gueconwpa~07-07-07
Contact details of provider: Postal: Georgetown University Department of Economics Washington, DC 20057-1036
Phone: 202-687-6074
Fax: 202-687-6102
Web page: http://econ.georgetown.edu/
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Order Information: Postal: Roger Lagunoff Professor of Economics Georgetown University Department of Economics Washington, DC 20057-1036
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  1. James J. Heckman, 1998. "Detecting Discrimination," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 101-116, Spring.
  2. Audra J. Bowlus & Zvi Eckstein, 1998. "Discrimination and Skill Differences in an Equilibrium Search Model," UWO Department of Economics Working Papers 9802, University of Western Ontario, Department of Economics.
  3. Blau, Francine D. & Kahn, Lawrence M., 2006. "The U.S. Gender Pay Gap in the 1990s: Slowing Convergence," IZA Discussion Papers 2176, Institute for the Study of Labor (IZA).
  4. Eckstein, Z. & Wolpin, K.I., 1992. "Duration to First Job and the Return to Schooling : Estimates form a Search -Matching Model," Papers 13-92, Tel Aviv.
  5. Bowlus, A.J., 1995. "A Search Interpretation of Male-Female Wage Differentials," UWO Department of Economics Working Papers 9504, University of Western Ontario, Department of Economics.
  6. Flinn, Christopher, 2003. "Minimum Wage Effects on Labor Market Outcomes under Search with Bargaining," IZA Discussion Papers 949, Institute for the Study of Labor (IZA).
  7. Luca Flabbi, 2004. "Gender Discrimination Estimation in a Search Model with Matching and Bargaining," Working Papers gueconwpa~04-04-08, Georgetown University, Department of Economics.
  8. 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 576-94, July.
  9. C. J. Flinn, . "Interpreting Minimum Wage Effects on Wage Distributions: A Cautionary Tale," Institute for Research on Poverty Discussion Papers 1214-00, University of Wisconsin Institute for Research on Poverty.
  10. Thomas Lemieux & Nicole M. Fortin, 2000. "Are Women's Wage Gains Men's Losses? A Distributional Test," American Economic Review, American Economic Association, vol. 90(2), pages 456-460, May.
  11. Zvi Eckstein & Éva Nagypál, 2004. "The evolution of U.S. earnings inequality: 1961?2002," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Dec, pages 10-29.
  12. Christopher J. Flinn, 2006. "Minimum Wage Effects on Labor Market Outcomes under Search, Matching, and Endogenous Contact Rates," Econometrica, Econometric Society, vol. 74(4), pages 1013-1062, 07.
  13. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162.
  14. James J. Heckman & Christopher J. Flinn, 1982. "New Methods for Analyzing Structural Models of Labor Force Dynamics," NBER Working Papers 0856, National Bureau of Economic Research, Inc.
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