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Wage Discrimination over the Business Cycle

  • Biddle, Jeff E.

    ()

    (Michigan State University)

  • Hamermesh, Daniel S.

    ()

    (Royal Holloway; University of Texas at Austin)

Using CPS data from 1979-2009 we examine how cyclical downturns and industry-specific demand shocks affect wage differentials between white non-Hispanic men and women, Hispanics and non-Hispanic whites, and African-Americans and non-Hispanic whites. Women's relative earnings are harmed by negative shocks; the wage disadvantage of African-Americans drops with negative shocks, which have slight negative effects on Hispanics' relative wages. Negative shocks also increase the earnings disadvantage of bad-looking workers. A theory of job search suggests two opposite-signed mechanisms that affect these wage differentials. It suggests greater absolute effects among job-movers, which is verified using the longitudinal component of the CPS.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6445.

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Length: 33 pages
Date of creation: Mar 2012
Date of revision:
Publication status: published in: IZA Journal of Labor Policy, 2013, 2:7
Handle: RePEc:iza:izadps:dp6445
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  1. Black, Dan A, 1995. "Discrimination in an Equilibrium Search Model," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 309-33, April.
  2. Blanchflower, D. & Oswald, A., 1989. "The Wage Curve," Papers 340, London School of Economics - Centre for Labour Economics.
  3. David G. Blanchflower & Andrew J. Oswald, 1992. "International Wage Curves," NBER Working Papers 4200, National Bureau of Economic Research, Inc.
    • David G. Blanchflower & Andrew Oswald, 1995. "International Wage Curves," NBER Chapters, in: Differences and Changes in Wage Structures, pages 145-174 National Bureau of Economic Research, Inc.
  4. Devereux, Paul J. & Hart, Robert A., 2005. "Real Wage Cyclicality of Job Stayers, Within-Company Job Movers, and Between-Company Job Movers," IZA Discussion Papers 1651, Institute for the Study of Labor (IZA).
  5. Peter Kuhn & Kailing Shen, 2013. "Gender Discrimination in Job Ads: Evidence from China," The Quarterly Journal of Economics, Oxford University Press, vol. 128(1), pages 287-336.
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  7. David G. Blanchflower & Andrew J. Oswald, 1995. "An Introduction to the Wage Curve," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 153-167, Summer.
  8. Christian Dustmann & Albrecht Glitz & Thorsten Vogel, 2006. "Employment, Wages, and the Economic Cycle: Differences between Immigrants and Natives," CReAM Discussion Paper Series 0609, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  9. Park, Seonyoung & Shin, Donggyun, 2005. "Explaining procyclical male-female wage gaps," Economics Letters, Elsevier, vol. 88(2), pages 231-235, August.
  10. Rosen, A., 1998. "Search, Bargaining and Employer Discrimination," Papers 1998-13, Uppsala - Working Paper Series.
  11. Orley Ashenfelter, 1969. "Change in Labor Market Discrimination Over Time," Working Papers 387, Princeton University, Department of Economics, Industrial Relations Section..
  12. Marston, Stephen T, 1985. "Two Views of the Geographic Distribution of Unemployment," The Quarterly Journal of Economics, MIT Press, vol. 100(1), pages 57-79, February.
  13. Casey B. Mulligan & Yona Rubinstein, 2008. "Selection, Investment, and Women's Relative Wages Over Time," The Quarterly Journal of Economics, MIT Press, vol. 123(3), pages 1061-1110, August.
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