Are Suburban Firms More Likely to Discriminate against African-Americans?

This paper assesses whether African-Americans are more likely to experience employment discrimination in the suburbs relative to the central city. We compare central city–suburban differences in racial hiring outcomes for firms where whites are in charge of hiring to the comparable difference for firms where blacks are in charge of hiring. Both suburban black and white employers hire fewer blacks than their central-city counterparts. This geographic gap among black employers is at least as large as that of white employers. Assuming no discrimination by black employers in any location, this implies that the probability of experiencing discrimination does not vary over space. Black firms, however, are substantially more likely to hire black workers regardless of location.     

Education,Occupation and Career Expectations: Determinants of the Gender Pay Gap for UK Graduates*

Despite anti‐discrimination policies, women are paid 20% less then men in the UK. A large proportion of this wage gap is usually left unexplained. In this paper, I investigate whether the unexplained component is due to mis‐specification. Using a sample of recent UK graduates, I examine the role of choice variables (subject of study and occupation) as well as career expectations and aspirations. The evidence indicates that women are more altruistic and less career‐oriented than men. Career break expectations, for example, explain 10% of the gender wage gap in the favoured model. By omitting attitudinal variables, most studies are likely to overestimate the unexplained component of the gender wage gap. Women with a more traditional view concerning childrearing are also found to have less intensive search behaviour. Since aspirations may reflect perceived discrimination or social pressure, current legislations are unlikely to reduce the gender wage gap.     

Wage and Nonwage Discrimination in Professional Basketball: Do Fans Affect It?

A bstract . Recent research suggests there is substantial wage discrimination against blacks in professional basketball , and that fans are the source of this discrimination. The use of multiple regression analysis does indicate a salary shortfall for black players of fourteen to sixteen percent compared with salaries of white players with comparable on-court performance. To see whether this shortfall is likely to be due to fan discrimination as the relatively scarce white talent is bid into cities with many white fans, the racial composition of teams is related to the proportion of black residents among the populations of franchise cities. There is statistically significant evidence of geographical sorting by race. Evidence of racial bias is less obvious in contexts where a team's performance would be jeopardized, however. Thus, no evidence is found that fan attendance moves inversely with the percentage of playing time accorded black players, and only weak evidence is found that black players have to be better than white players to enter the National Basketball Association (NBA).     

Gender gaps across the earnings distribution for full-time employees in Britain: Allowing for sample selection

This paper investigates gender differences across the log wage distributions of British employees working full-time in 2005. The raw gender wage gap shows a tendency to increase across the distribution with a glass ceiling effect indicated. A strong relationship between high skilled, white-collar occupations and carrying out managerial duties with the glass ceiling effect is indicated in the data. After allowing for positive selection into full-time employment by British women, a substantially larger gender earning gap is found: the selection corrected gender wage gap is close to twice the raw gap across most of the earnings distribution. This selection corrected gap is found to be predominantly related to women receiving lower rewards for their characteristics than men. Indeed, the results suggest the gender earnings gap would all but disappear across the earnings distribution if women working full-time received the same returns to their characteristics as men working full-time in Britain do.     

Performance Pay,Union Bargaining and Within‐Firm Wage Inequality*

Theory predicts that performance pay boosts wage dispersion. Workers retain a share of individual productivity shocks and high‐efficiency workers receive compensation for greater effort. Collective bargaining can mitigate the effect of performance pay on wage inequality by easing monitoring of common effort standards and group‐based pay schemes. Analyses of longitudinal employer–employee data show that the introduction of performance‐related pay raises wage inequality in non‐union firms, but not in firms with high union density. Although performance‐related pay appears to be on the rise, the overall impact on wage dispersion is likely to be small, particularly in European countries with influential unions.     

The impact of cognitive skills on the distribution of the black-white wage gap

In this paper we use a semi-parametric estimation procedure to examine differences in the distribution of wages for black and white male workers in the US. In keeping with recent studies we find that differences in cognitive skills are an important determinant of the black-white wage gap and can explain almost the entire male racial wage gap among high wage workers. However, we find that equalising the distribution of cognitive skills will be less successful in reducing this gap at the lower end of the distribution.     

Equal-treatment policy in a random search model with taste discrimination

We consider a search model of the labor market with two types of equally productive workers and two types of firms, discriminators and non-discriminators. Without policy intervention, there is wage dispersion between and within the two worker groups, but all wage differences become negligible when the taste for discrimination is small. We analyze the effect of an equal-pay policy, both in combination with affirmative action and without. When equal opportunity of hiring cannot be enforced, wage dispersion increases and wages for minority workers fall substantially relative to laissez faire. Sometimes also the wage gap between worker groups widens in response to the policy.     

Simulation Estimation of the Convergence of the Black–White Earnings Gap and Income Dynamics*

In this article, the effect of Title VII of the 1964 Civil Rights Act on the convergence of the black–white earnings gap and income dynamics is studied through the dynamic panel Tobit models implemented using the simulation estimators. It is found that the black–white earnings gap declined moderately after the implementation of Title VII of the 1964 Civil Rights Act in 1965. Based on the simulation studies of wage trajectories, it is also found that the positive impact of the Civil Rights Act on the convergence of the black–white earnings gap is especially significant for the group of middle‐aged and highly educated workers. Moreover, the rich dynamic structure of the earnings process is identified from the Current Population Survey‐Social Security Administration data set. It is shown that the various sources of dynamics in the earnings process are dominated by spurious state dependence for both blacks and whites.     

Gender differences in early-career wage growth

In Finnish manufacturing, the gender wage gap more than doubles during the first ten years in the labour market. This paper studies the factors contributing to the gender gap in early-career wage growth. The analysis shows that the size of the gender gap in average wage growth varies with mobility status, the gap being higher with employer changes compared to wage growth within firms. Several explanations for the gender gap in wage growth based on human capital theory and theory of compensating wage differentials are considered. However, much of the gap in wage growth remains unexplained. The distributional analysis of the wage growth shows that the female wage penalty increases significantly as we move along the conditional wage growth distribution, the increase being stronger with employer changes compared to within-firm wage growth.     

Job mobility and the gender wage gap in Italy

This paper investigates the contribution of gender differences in job mobility to the emergence of a gender wage gap in the Italian labour market. We show that over the first 10 years of labour market experience job mobility accounts for up to 30% of total log wage growth for men and only 8.3% for women, and that this difference is mainly due to differences in returns to mobility. The gender mobility gap is robust to the inclusion of individual, job and firm characteristics, to different ways of accounting for individual unobserved heterogeneity, and is mainly found for voluntary job moves. Looking at the characteristics of the jobs and the firms' workers move to, we find that moves to larger firms represent by far the main source of gender differences in returns to mobility. We offer two possible explanations for this finding; one which involves differences in bargaining behaviour and one which relates to the theory of compensating differentials.     

Are Reports of Discrimination Valid? Considering the Moral Hazard Effect

A bstract .   Antidiscrimination laws are designed to prompt employers to stop excluding black workers from jobs they offer and from treating them unequally with respect to promotion and salaries once on the job. However, a moral hazard effect can arise if the existence of the laws leads black employees to bring unjustified claims of discrimination against employers. It has been argued that employers may become more reluctant to hire black workers for fear of being subjected to frivolous lawsuits.
Using the Multi-City Study of Urban Inequality (MCSUI), we find that male and female black workers are far more likely than whites to report racial discrimination at work. This is the case even when a host of human capital and labor market factors are controlled for. Further, nearly all black workers who report they have been discriminated against on the job in the MCSUI Surveys also show statistical evidence of wage discrimination. This is not the case for white males or females. We find little evidence to support a moral hazard effect.     

Smoking,seat belts,and other risky consumer decisions: Differences by gender and race

Using data from a large national survey, this paper documents substantial differences by gender and race in smoking behavior, seat belt use, preventative dental care measured by teeth brushing and flossing, exercise, and whether the individual checks his or her blood pressure. White women are the most protective of their health, while black males are the least likely to take health-enhancing actions. However, the racial gap in safety behavior narrows considerably or reverses after controlling for demographic, human capital, and labor market characteristics that affect safety choices. On the other hand, the safety gap by gender increases after controlling for characteristics.     

Gender earnings gap: the role of firm specific effects

The gender earnings differential is an intensely studied issue in labour economics. However, existing studies do not examine how the wage policies of firms affect gender earnings differentials. This paper uses employer–employee linked data to address this issue. The Juhn et al. [Juhn, C., Murphy K., Pierce, B., 1991. Accounting for the slowdown in black–white wage convergence, in M.H. Kosters, ed. Workers and Their Wages, AEI Press, 107–143] decomposition methodology is extended to incorporate the decomposition of firm fixed effects. It is found that, on average, firms' wage policies are associated with a significant narrowing of the gender earnings gaps. Further analysis indicates that firms which are more likely to have narrower gender earnings gaps are those subject to strong market competition, find it easy to identify labour productivity at the individual level, and with no enterprise level wage bargaining.     

Trade union membership and dismissals

In Germany, there is no trade union membership wage premium and a membership fee of 1% of the gross wage. Therefore, prima facie, there are strong incentives to free-ride on the benefits of trade unionism. We establish empirical evidence for a private gain from trade union membership which has hitherto not been documented: in Western Germany, union members are less likely to lose their jobs than non-members. In particular, using data from the German Socio-Economic Panel we are able to show that roughly 50% of the observed raw differential in individual dismissal rates can be explained by the estimated average partial effect of union membership.     

Explaining Differences in Economic Performance Among Racial and Ethnic Groups in the USA

A bstract . By utilizing self-reported race and ancestry in the 1980 and 1990 USA censuses and the Blinder-Oaxaca decomposition technique, the extent of wage discrimination experienced by women and by men is examined across 50 ethnic/racial groups. Systematic evidence of negative discrimination is revealed in both census years for Asian, Indian, black (African-American), Vietnamese, Cuban, Mexican, Puerto Rican , and Native American males. To assess the charge that the Blinder-Oaxaca decomposition indicates cultural rather than discriminatory differentials, two additional data experiments are performed—one that controls for color and varies culture, and one that controls for culture and varies color. Race appears to matter.     

Noncognitive skills, occupational attainment, and relative wages

This paper examines whether men's and women's noncognitive skills influence their occupational attainment and, if so, whether this contributes to the disparity in their relative wages. We find that noncognitive skills have a substantial effect on the probability of employment in many, though not all, occupations in ways that differ by gender. Consequently, men and women with similar noncognitive skills enter occupations at very different rates. Women, however, have lower wages on average not because they work in different occupations than men do, but rather because they earn less than their male colleagues employed in the same occupation. On balance, women's noncognitive skills give them a slight wage advantage. Finally, we find that accounting for the endogeneity of occupational attainment more than halves the proportion of the overall gender wage gap that is unexplained.     

The Pursuit of Opportunity: Explaining Selective Black Migration

This paper examines the destination choices of black migrants during the Great Migration. As previous research has shown, educated blacks were more likely to relocate to the North in the pre-World War II era. This analysis shows that this tendency can be attributed to the better educated migrants' ability to finance transportation costs, greater responsiveness to intercity wage differentials, and stronger distaste for Southern disamenities. After 1940, the destination choice gap closed, largely because migrant responses to wage differentials and valuation of Southern disamenities changed. These changes are observed both in the population at large and within birth-year cohorts.     

The Gender Wage Gap in Europe: Job Preferences,Gender Convergence and Distributional Effects

The gender wage gap has declined over time. However, most of the remaining gap is unexplained, partly because of gender convergence in wage‐determining characteristics. In this paper, we show the degree of convergence differs substantially across Europe. In some countries, predominantly in Eastern Europe, the gender wage gap is entirely unexplained. However, in other countries, differences between the characteristics of men and women explain a relatively large proportion of the wage gap. Gender differences in job preferences contribute 10% to the wage gap, which is more than job tenure, previous employment status or field of study. The role of job preferences is particularly strong at the top of the wage distribution.     

Technology,Labour Characteristics and Wage‐productivity Gaps*

We use plant‐level employer–employee data in production functions and wage equations to examine whether wages are based on productivity. We use a stepwise procedure to find out how the results are influenced by the kind of data that is available. The models include shares of employee groups based on age, level and field of education, and sex. The gap between the age‐related wage and productivity effects increases with age. Education increases productivity, but wage under‐compensates productivity especially for those with the highest level of non‐technical education. For women the results depend greatly on the specification and method used.     

A theory of minimum wage compliance (or voluntary recognition of unions)

An urn-ball matching model of the labor market is used to develop a theory of minimum wage compliance or voluntary recognition of unions. Workers can direct their search but, in the absence of wage commitment from the firms, they have no basis to do so. The default means of wage formation in one-on-one matches is Nash bargaining. When there are multiple applicants competition drives the workers down to their continuation value. By attracting more applicants, a binding wage floor provides a means for firms to increase matching rates and improve match quality. An otherwise poorly enforced minimum wage acts as a commitment device for the payment of more generous wages.