Ethnic Discrimination in Germany's Labour Market: A Field Experiment

Abstract. This paper studies ethnic discrimination in Germany's labour market with a correspondence test. We send two similar applications to each of 528 advertisements for student internships, one with a Turkish‐sounding and one with a German‐sounding name. A German name raises the average probability of a callback by about 14%. Differential treatment is particularly strong and significant in smaller firms at which the applicant with the German name receives 24% more callbacks. Discrimination disappears when we restrict our sample to applications including reference letters which contain favourable information about the candidate's personality. We interpret this finding as evidence for statistical discrimination.     

Ethnic patterns of returns to education in Bulgaria

It is widely accepted that disparities in education contribute to the poor labour market outcomes experienced by ethnic minority groups and consequently to their poverty. In this article, I analyse differential educational benefits in Bulgaria and compare returns to education for the Roma minority with the majority population and the Turkish minority. I show that both ethnic minority groups have lower education levels and employment rates than the majority population and that they also have lower returns to education. This result could be related to minorities' lower education quality as well as to discrimination in the labour market. Integration policies should thus aim to improve employability and labour market competence of vulnerable groups starting from school.     

Self-assessed vs. statistical evidence of racial discrimination: the case of indigenous Australians

This paper provides new insights on the labour market discrimination faced by indigenous Australians one of the most disadvantaged indigenous populations in developed countries. Combining two large, nationally representative datasets, we decompose the employment gap between indigenous and non-indigenous populations as of 2014–2015, and show that differences in characteristics between the two groups account for only 43% of the employment gap for females, and 23% of the gap for males. We then demonstrate that statistical measures are positively related to discrimination reports of females and negatively related to discrimination reports of males. Our findings underscore the importance of improving transparency in employment processes for addressing the issue of disadvantage of racial minorities.     

Estimating the relationship between labour market tightness,unemployment insurance benefits and union election activity

Using detailed data from the US National Labor Relations Board, we find labour market tightness, defined as the ratio of job vacancies to the number of unemployed, has a positive relationship with the likelihood of voting in favour of union representation. Specifically, a 1 SD increase in labour market tightness increases Vote Share in favour and the likelihood of union certification by roughly 1.5% and 3%, respectively. We also find that length of unemployment insurance benefits has a positive relationship with Vote Share in favour. Taken together, these results suggest that workers are more comfortable engaging in pro-union election behaviours when exogenous conditions, like labour market tightness and unemployment insurance benefit duration, shift in a way that more favourably insulates them from unemployment and income risk.     

Gender wage gap across the wage distribution in different segments of the Indian labour market, 1983–2012: exploring the glass ceiling or sticky floor phenomenon

Women’s participation in the Indian labour market is not only low but they are also engaged in low-productivity and low-paying jobs. Further, the labour market is segmented by gender, type of employment, sector and location of residence. This study makes an important contribution by examining gender wage gap in India across different segments of the labour market over the wage distribution using national-level representative data spanning the period 1983 to 2012. The empirical results suggest that (i) the male–female raw wage gap has declined over time across the wage distribution, (ii) the gender wage gap attributable to differing returns to characteristics has increased over time and there is evidence of convergence of productive characteristics of men and women, (iii) sticky floor rather than glass ceiling phenomenon is observed in all segments of the labour market and (iv) the adjusted wage gap suggests that women at the bottom of the distribution face higher discrimination than those at the top and this has increased over the years.     

Discrimination and Job Quality: the youth labour market in the 1980s

The purpose of this paper is to investigate the extent to which discrimination early in one's career can have lasting effects on job quality even after the discrimination itself disappears. The results show that for young workers in the 1980s, discrimination is a short run phenomenon, and furthermore, the effects disappear relatively quickly. This research makes two contributions to the existing empirical literature on labour market discrimination. First, we broaden the measure of discrimination beyond wages by utilizing the Duncan Index of job quality to measure differences in labour market outcomes. Second, most empirical work has been concentrated on the effects of discrimination at a point in time using cross-sectional data. We develop a dynamic model to measure changes in job quality over time as workers gain experience over their first three years in the permanent labour market. From the results found in our empirical work, we are able to analyze the long run impact of initial discrimination. In other words, our methodology allows us to examine time dependent effects that are not observed in cross-sectional studies.     

Labour market discrimination against former juvenile delinquents: evidence from a field experiment

In view of policy action to integrate ex-offenders into society, it is important to identify the underlying mechanisms of the negative relationship between criminal record on the one hand and later employment and earnings on the other hand. In this study, we identify hiring discrimination against former juvenile delinquents in a direct way. To this end, we conduct a field experiment in the Belgian labour market. We find that labour market discrimination is indeed a major barrier in the transition to work for former juvenile delinquents. Labour market entrants disclosing a history of juvenile delinquency get about 22% less callback compared to their counterparts without a criminal record. This discrimination is heterogeneous by the occupation for which one applies.     

Detecting policy effects with wage rigidity and instability – evidence on the Taiwan labour market

With stagnant wages and growing productivity, a widening gap is becoming prevalent in global labour markets. The relationship between wages and productivity has become indeterminate, especially after the 2008 financial crisis. This article presents the phenomenon for why salary rarely follows up with productivity after an economy recovers. By using the GMM method, this study shows the interaction among wage, productivity and tightness, in which we illustrate the Taiwan labour market as an example to show how hiring system changes press wages away from an efficient allocation, causing instability and market failure. Surveying 35 labour markets for different industries, we reveal that the situation in the labour markets has drastically changed since 2008. We find that this resulted in a severe problem when the Taiwan firms got used to policies like ‘22K’, ‘fix-term contract’ and ‘unpaid leave’ programmes. These plans negatively impacted the economy and raised market failure with instability.     

The role of supervisors in the determination of wages and wage gaps

This article considers labour market discrimination by supervisors as a potential contributor to racial and gender wage gaps. Empirical analysis reveals evidence that all workers, except Hispanic males, earn significantly higher hourly wages when working for a supervisor of the same race and sex as themselves. Furthermore, the results suggest that sex has a larger impact on wages than race for workers with white supervisors, while race has a larger impact on wages than sex for workers with minority supervisors. Based on past research, we theorize that the degree of labour discrimination workers face may also be dependent upon the location and size of the firm in which they are employed. However, decomposing the samples by firm location and size suggests that these two factors cannot adequately explain the observed matched supervisor–worker wage effects, which supports the notion that these wage effects are largely driven by factors other than supervisor discrimination.     

Age discrimination in the UK labour market. Does race moderate ageism? An experimental investigation

Governments encourage people to work longer in order that pension promises are sustainable as populations age. This approach presupposes that older workers are welcome in the market. This study undertakes a correspondence test to investigate whether ageism is prevalent in the UK at the initial stage of the hiring process. This study adds to the literature by investigating whether race can moderate the relationship between age and labour market outcomes. The results suggest that older people are penalized in the labour market. They have lower access to vacancies and sorting in lower-paid jobs. A minority racial background exacerbates both penalties. These new results call for anti-ageism and anti-racial policy actions in the workplace.     

Gender Discrimination in Central Europe during the Systemic Transition

In this paper we measure the extent of gender discrimination on Central European labour markets (Czech, Hungarian, Polish and Slovak) during the first years of transition. Using Oaxaca's method and Social Stratification Survey data for 1993, we estimate that discrimination explains about half of the wage gap. Gender discrimination is significantly weaker in Hungary and stronger in Slovakia and Poland, where a large part of discrimination is tied to segregation. More fundamentally, we try to determine the nature of this discrimination; we conclude that discrimination is mainly statistical (both group and individual), but also deliberate, and the labour market is partly inefficient.     

The Russian–Ukrainian earnings divide1

Ethnic differences are often considered to be powerful sources of diverse economic behaviour. In this article, we investigate to what extent ethnicity affects Ukrainian labour market outcomes. Using microdata from the Ukrainian Longitudinal Monitoring Survey and the Oaxaca–Blinder decomposition of earnings, we find a persistent and increasing labour market divide between ethnic Russians and Ukrainians throughout Ukraine’s transition era. We establish that language, rather than nationality, is the key factor behind this ethnic premium favouring Russians. Our findings further document that this premium is larger amongst males than females.     

Measuring the cyclicality of labour market flows using individual transitions

We investigate whether the choice of a business cycle measure affects estimates of the cyclicality of labour market flows. We exploit precise administrative data on individual labour market transitions and study the association of alternative business cycle measures with individual transitions between employment and unemployment. We find indeed substantial heterogeneities across business cycle indicators that may have affected the results of prior studies on labour market transitions.     

ESTIMATED SMALL OPEN ECONOMY MODEL WITH FRICTIONAL UNEMPLOYMENT

This paper investigates labour market dynamics in New Zealand by estimating a structural small open economy model enriched with standard search and matching frictions in the labour market. We show that the model fits the business cycle features of key macroeconomic variables reasonably well and provides an appealing monetary transmission mechanism. We then extend our analysis to examine the driving forces behind labour market variables. Our findings suggest that the bulk of variation in labour market variables is solely explained by disturbances pertaining to the labour market.     

Weight discrimination in the German labour market

We explore the effects of higher body mass index (BMI) or obesity on different labour market outcomes. We extend the present literature by investigating the effect of obesity on (i) promotion likelihood and (ii) unemployment duration, in addition to the effect on (iii) wages and (iv) probability of being employed. We find an obesity penalty on wages, employment likelihood, promotion likelihood and unemployment duration among females in Germany taking into account of endogeneity of BMI and sample selection. We are also able to identify an unexplained effect of obesity on wages, employment and promotion likelihood for females using decomposition techniques that can be attributed to weight discrimination.     

The impact of sectoral shifts and the aggregate labour market on unemployment duration

This study investigates the effects of sectoral shifts among industries on unemployment duration. These effects are decomposed into two subeffects: the overall effect and the specific industrial effect. The former is equal for all of the unemployed in all industries, while the latter depends on the tightness of the demand for labour of the industry in question. In addition, the impact of the aggregate labour market on unemployment duration is also explored. The empirical results show that most of the overall and all of the specific effects are significant, indicating that the sectoral shifts among industries as well as the aggregate labour market do in fact impact unemployment duration, and that the effects on unemployment duration vary in terms of their tightness in the different industrial labour markets.     

Search,shirking and labor market volatility

This paper proposes a modified version of the standard search and matching model of the labour market that includes a shirking mechanism. We show that our model delivers a close match to the simulated volatilities, correlations and autocorrelations of unemployment, vacancies, labour market tightness and the job finding rate with values observed in US data. In doing so, it outperforms prominent alternative models. Our model also has novel policy implications for the impact of income taxes, subsidies on hiring and employment taxes on unemployment and its volatility.     

消除劳动力歧视,推进农村剩余劳动力资源顺利转移

劳动力合理流动是劳动力资源充分利用、市场经济正常运转、农村剩余劳动力顺利转移的重要条件。当前 ,由于各种因素的影响 ,全国统一、开放、竞争、有序的劳动力市场还没有形成 ,劳动力歧视妨碍了农村剩余劳动力的转移和劳动力资源的合理利用。消除劳动力歧视 ,有利于促进劳动力合理流动和市场经济正常运行及二元经济结构转换     

PRECAUTIONARY DEMAND FOR LABOUR AND FIRM SIZE

This paper studies firms' job creation decisions in a labour market with search frictions. A simple labour market search model is developed in which a firm can search for a second employee while producing with a first worker, and this creates the equilibrium size distribution of firms. A firm expands employment even if the instantaneous payoff to a large firm is less than that of staying small – a firm has a precautionary motive to expand its size. In addition, this motive is enhanced by a greater market tightness. Because of this effect, firms’ decisions become interdependent – a firm creates a vacancy if it expects other firms to do the same, creating strategic complementarity among firms and thereby self‐fulfilling multiple equilibria. An increase in productivity can cause a qualitative change in labour market tightness and the rate of unemployment.     

Shocked by therapy? Unemployment in the first years of the socio-economic transition in Poland and its long-term consequences

We examine the long-term implications of unemployment for material conditions and well-being using the Polish sample from the Survey of Health, Ageing and Retirement in Europe (SHARE). Retrospective data from the SHARELIFE survey are used to reconstruct labour market experiences across the threshold of the socio-economic transformation from a centrally planned to a free market economy in Poland. These individual experiences are matched with outcomes observed in the survey about 20 years later to examine their correlation with unemployment at the time of the transition. We find that becoming unemployed in the early 1990s correlates significantly with income, assets and a number of measures of well-being recorded in 2007 and 2012. Using plant closures to reflect exogenous changes to labour market status at the time of the transition, we are able to confirm the causal effect of unemployment on income and house ownership 20 years later, but find no evidence for a long-term causal relationship between unemployment and such measures of well-being as life satisfaction, depression and subjective assessment of material conditions.