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.