Chapter 9Discrimination

• Discrimination: one source of earnings differences by race and sex.

• See Figure 9.1: compares earnings for FT YR workers over time.– AA vs Whites: 1940 to 2000:

– Men vs Women: 1940 to 2000

Two Types of Discrimination

• 1) Pre-market discrimination:

• 2) Market discrimination:

• Sources of mkt discrimination:– Personal prejudice:– Market power:– Statistical discrimination:

More on Discrimination

• D. and Lifecycle earnings: any small discrimination at start of career (education, hiring, OJT) can result in very large wage differences later in life.

• Glass Ceiling:

• See Table 9.3.

More on D

• Reverse discrimination: when majority group is discriminated against to “make up for” past discrimination.

• Results from explicit quotas or fear of lawsuit from minority.

• In reality: very little takes place but when it does, makes big news (like “man bites dog”).

Measuring Discrimination

• Most common: residual method: try to explain as much of difference as can with factors that should affect differences (like education, occupation, OJT, intermittent work, etc.). See Table 9.4.

• Part left unexplained is attributed to discrimination.

• Audit Studies (Matched Pairs; Not in textbook).

• Strongly suggestive of persistent discrimination.

Economic Progress of African Americans

• AA: See Table 9.5: shows improvement () in earnings gap, education gap, %poverty; occupational disparities.

• Worrisome Trends: little improvement in last two decades; more than doubling of families with/female head; persistent gaps in empl gaps.

• Growing group of “have-nots”

Economic Progress for Women

• Clear improvement in FT earnings gap, less occupational segregation, entering wages for college grads very similar, more work experience.

• Concerns: persistent gap for mothers versus non-mothers.

• Mommy Track:

• Comparable Worth:

Anti-Discrimination Legislation

• Civil Rights Act of 1964—Title VII makes it unlawful:

• “to refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges or employment, because of such individual’s race, color, religion, sex, or national origin.”

• Series of updates.• Age Discrimination in Employment

Act of 1967 (ADEA).• Americans with Disabilities Act:

(ADA, 1992)