Indirect Re–employment Wage Discrimination

This paper looks at unemployed individuals and investigates wage differences generated by re–employment selection. It shows that discriminatory re–employment selection can result, indirectly, in discriminatory re–employment pay. A Heckman two–stage selection model is combined with an extension of Gomulka–Stern non–linear decompositions to explain how re–employment selection generates indirect discrimination. The paper uses data from pre–unification Germany in the late 1980s and finds that female human capital suffers more from unemployment and that the market is harsher to males for becoming unemployed. New policies should encourage a regime where the hiring process is more transparent and hiring decisions are monitored on a regular basis.     

Consumer preferences and employment discrimination

Many American managers are under increasing pressure to base hiring and other employment decisions on consumers' preferences. This study attempts, in exploratory fashion, to identify traits of in-person service workers (IPSWs) that are preferred by consumers and could serve as the basis for employment discrimination. Preliminary results indicate that consumers do have strongly held preferences when a transaction involves significant customer-worker interaction. Females appear to be a more likely source of consumer-based discrimination than males for high involvement purchases. Briefly discussed is the question of whether consumers have stereotypical beliefs about IPSWs as well as the implications of these beliefs.     

Belief flipping in a dynamic model of statistical discrimination

The literature on statistical discrimination shows that ex-ante identical groups may be differentially treated in discriminatory equilibria. This paper constructs a dynamic model of statistical discrimination and explores what happens to the individuals who nonetheless overcome the initial discrimination. If an employer discriminates against a group of workers in her initial hiring, she may actually favor the successful members of that group when she promotes from within the firm. The worker's welfare implications (i.e. who benefits from an employer's discriminatory hiring practices) are unclear. Even though agents face discrimination initially, some may be better off because of it.     

Discriminating factors of women's employment

Italy exhibits a dramatic level of territorial heterogeneity in terms of socio-economic dynamics and in the economic position of women. We employ this territorial variance to assess the impact of selected policies and institutions on men's and women's employment using microeconomic data. Such an analysis provides results partly different from what was expected on the basis of cross-country aggregate evidence on industrialized countries. Aggregate growth and tertiarization of the economy are surprisingly found beneficial only to men's employment, while culture and discrimination are relevant for women's. Social Assistance is found highly significant too, with the provision of services being more beneficial to women's employment than monetary transfers.     

Estimation of income elasticities from cross-section data

Using Johnson's decomposition technique, this paper demonstrates that the disappearance of the gap between female and male unemployment rates in the United States during the last decade results partly from a general hiring policy that is favourable to women workers. This conclusion holds for workers in five out of eight occupational subsamples considered. The sign and size of unexplained female - male unemployment rate differential estimated from 1969, 1977 and 1987 CPS data suggest that hiring discrimination against females in the US labour market has declined considerably during the last two decades. The study also supports the earlier finding that the growth of employment in government and in the female dominated service sector, and migration of workers from the South to other regions contribute significantly to the convergence of male and female unemployment rates in the 1980s.     

Gender discrimination in China: Experimental evidence from the job market for college graduates

This paper examines employment-related gender discrimination during the initial stages of a hiring process. It specifically focuses on recent college graduates in China. By examining firms’ responses to fictitious resumes with randomly generated information on gender and other key attributes of applicants (e.g., school reputation, student's academic achievement, and leadership experiences), this study is able to separate the effect of gender on a student's potential for getting an on-site interview from the confounding effects of other factors. The findings reveal that, with all other factors remaining constant, female applicants, on average, are less likely to be invited by hiring firms to on-site interviews as compared with their male counterparts. Furthermore, gender discrimination in computer and mathematics, architecture and engineering, and sales occupations appears to be driving the results of this study. The qualitative evidence based on interviews with firm recruiters suggests that the findings of this study are generally consistent with the role congruity theory of prejudice in psychology literature. While the finding that the quality of a job candidate (academic achievement and leadership experience) does not reduce gender discrimination offers some evidence to support a taste-based discrimination view, we do not have enough evidence to support a statistical discrimination view.     

Native–immigrant employment differentials in The Netherlands: the role of assimilation and discrimination

This article presents an empirical analysis of the employment probabilities of immigrant men from The Netherlands' Antilles, Surinam, Turkey and Morocco living in The Netherlands. The main themes are the roles of assimilation and discrimination. The findings indicate that assimilation contributes significantly to the employment opportunities of the Antilleans and Turks. They also suggest that discrimination against the Surinamese and Turks is responsible for a substantial proportion of their employment gap with natives.     

Fertility and the puzzle of female employment in the Middle East and North Africa

Female labour force participation rates across the Middle East and North Africa (MENA) region have remained low for over four decades even though, in the same period, women's education rapidly increased and fertility rates substantially decreased. This study provides a better understanding of this surprising phenomenon by testing whether the number of children affects the mother's labour supply (using twins at first birth as an instrumental variable.) Despite a strong first stage, it does not find statistically significant effects in the second stage, even in the combined sample of over 100,000 observations. This non‐result, however, does not rule out that fertility affects women's employment in these countries. But it rejects impacts larger than 0.09. Similar twin‐studies in the United States found effects between 0.12 and 0.31. The paper discusses the implications of this result in understanding the puzzle of female participation in MENA and in designing policies to increase women's employment.     

Caste discrimination and transaction costs in the labor market: Evidence from rural North India

This paper is an empirical attempt to quantify caste-based discrimination in the labor market using household data taken from rural North India. In the regression analysis, transaction costs associated with entry into the labor market and reservation wages are estimated simultaneously along with market wages. The estimation results provide evidence of the existence of transaction costs in the labor market and discrimination against backward classes with regard to access to regular employment. In line with previous studies, the results suggest that the achievements of India's reservation policy so far have at best been limited. In addition, a comparison between the estimates from the model employed in this paper and conventional (reduced-form) approaches shows that discrimination in labor market entry is likely to be underestimated in the conventional reduced-form approaches.     

Marriage and employment participation with wage bargaining in search equilibrium

We build an equilibrium search model where married couples make joint decisions on home production and labour market participation and analyse the implications of our results for a frictional marriage market. A worker's bargaining position reflects their productivity, and the productivity and employment status of their spouse. People sometimes accept transitory jobs only to raise the spouse's long-term wages. Firms sometimes reduce turnover by unilaterally increasing a worker's wage, ensuring that the spouse stays at home.     

STRATEGIC DELEGATION UNDER UNIONISED DUOPOLY: WHO WILL BARGAIN WITH UNIONS?

This paper investigates the choice of a firm's delegate (either the owner or the manager) bargaining wages and employment with a union under a unionised duopoly. We show that if an owner delegates the task of bargaining to a manager, the owner always compensates the manager for profits by penalising sales, regardless of whether the rival owner delegates or not. Moreover, we show that an owner's decision to delegate the task of bargaining to a manager depends on the incremental benefit of delegating and the cost of hiring a manager. The asymmetric outcome (wherein one owner delegates but the other does not) can occur if there is a sufficiently large disparity of hiring costs between the owners. Finally, we show that the union in an owner‐managed firm always earns more than the union in a managerial firm.     

Family ties and employment behavior: The role of financial intermediaries

We study the interaction effect of financial intermediaries and family ties on labor participation and employment type in China. Although existing studies examine these effects separately, we investigate the effects of both factors in one model. We give empirical evidence to support earlier arguments that family ties negatively affect labor force participation and positively affect self‐/family‐employment behavior and that financial development positively affects labor force participation. Departing from the extant literature, our results overall indicate a compensating effect of financial intermediaries for family ties in labor participation and employment type. We further argue that there are gender, urban/rural, and age differences in the role of financial intermediaries. The effect of financial intermediaries on the strength of family ties is more relevant for female, rural, and younger people compared to male, urban, and older people.     

Women returning to paid employment

Using data from the 1975/76 National Training Survey, this paper investigates some aspects of women's working lives. An attempt is made to control for life-cycle effects in order to investigate the extent to which the pattern of women's work histories has changed in younger cohorts. Particular attention is paid to the phenomenon of returning to the labour market after a period of withdrawal. This return is often accompanied by a phase of part-time employment and evidence is presented to suggest that there is widespread mismatching between a woman's training and the skill requirements of the job to which she returns. The paper concludes with a discussion of the policy implications of the findings.     

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.     

Sources of employment fluctuations in Taiwan's industries and regions

This empirical study explores the sources of employment fluctuations in Taiwan's industries and regions over the period 1978 to 2004. The quarterly growth rates of employment in nine industries and four regions are modelled with a structural vector autoregression (VAR), and the employment shocks are measured by VAR residuals. The covariance matrix of the VAR residuals is decomposed using system estimation method that selects the parameters to make the error model close to the covariance matrix and, in turn, to estimate the relative importance of national as well as industry-specific and region-specific shocks. The empirical results show that industry-specific shocks account for the major fluctuations in industries and regions. On average, about 83.95% of an industry's cyclical variations and 56.28% of the volatility in a region may be attributed to industry-specific shocks. National shocks account for little employment volatility in industries. Only the finance and personal service industries are highly sensitive to national shocks.     

The Alleged Value Neutrality of Economics: An Alternative View

This paper analyzes bank lending activities for owner-occupied housing loan extensions to minority members of Mississippi’s population. We analyze data on housing loan applications and accessibility patterns among the minority Black population relative to the majority White population groups in the State. The study looks hard at data for evidence of any patterns of discrimination toward minority housing loan applicants. And a Probit model is applied to examine the relative importance of economic variables (such as employment status, income level, and credit rating) versus noneconomic parameters (such as geographical location) in the housing loan decision making of banks toward minority borrowers. The evidence from our comparative data analysis suggests that there is a consistently high denial rates for minorities, which is not explained by financial (economic) factors. The formal test of discrimination with the Probit analysis also indicates some evidence of discrimination from, at least, the standpoint of redlining practices, albeit only with a modest predictive power.     

Idiosyncratic risk and aggregate employment dynamics

This paper studies how idiosyncratic productivity risk impacts aggregate employment dynamics when there is a trade-off between workers' productivity and costs of job creation and destruction. In our analysis, increasing idiosyncratic risk induces a producer to move workers out of structured jobs that are costly to create and destroy and towards less productive but more flexible unstructured positions. This substitution leaves the producer's total employment more responsive to both idiosyncratic and aggregate disturbances. If all of an industry's producers respond to heightened idiosyncratic risk in this way, then industry-wide employment can respond more to a given aggregate shock. We apply this insight to connect differences between young and old manufacturing plants' aggregate employment dynamics with their corresponding differences in idiosyncratic variability.     

Smartphone use,off-farm employment,and women's decision-making power: Evidence from rural China

Empowering women is an important goal of the United Nations' Sustainable Development Goals, and studies have proposed various strategies to achieve this goal. However, few have examined the role of smartphone use in empowering women in decision-making and its mechanism. Therefore, this study analyzes how smartphone use affects women's decision-making power and explores whether this influence is due to women's off-farm employment mechanisms. For this purpose, the study uses the survey data of 1110 households in rural China and the endogenous treatment regression model for analysis. The control function approach addresses the selection bias of off-farm employment. The results show that smartphone use significantly increases women's decision-making power, partially channeled through increasing women's off-farm employment. The mechanism effect is robust to using both binary and intensive measurements of off-farm employment. Therefore, a policy to improve access to internet facilities and smartphone use could improve women's decision-making power through employment in the off-farm sector.     

The employment dynamics of different population groups over the business cycle

We examine differences in employment dynamics across population groups using Bayesian vector autoregressions. We document that groups who are particularly strongly affected by business-cycle fluctuations (males, young people, non-whites, the less educated, and workers in blue-collar occupations) also tend to be affected early in the build-up of a boom or bust. We further identify the drivers of the different cyclicalities across population groups. Supply shocks seem to be most important for the heterogeneous employment fluctuations and particularly for the early effects of recessions and booms on the most affected groups. Dynamics in sectoral activity and in hiring rates can help to understand our findings.     

The consequences of labor market flexibility: Panel evidence based on survey data

We introduce a new data set on hiring and firing restrictions for 21 OECD countries for the period 1984-1990. The data are based on surveys of business people in the countries covered, so the indices we use are subjective in nature. Controlling for country and time fixed effects, and using dynamic panel data techniques, we find evidence that increasing the flexibility of the labor market increases both the employment rate and the rate of participation in the labor force. A conservative estimate suggests that if France were to make its labor markets as flexible as those in the US, its employment rate would increase 1.6 percentage points, or 14% of the employment gap between the two countries. The estimated effects are larger in the female than in the male labor market, although both groups seem to have similar long-run coefficients. There is also some evidence that more flexibility leads to lower unemployment rates and to lower rates of long-term unemployment. We also find evidence consistent with the hypothesis that inflexible labor markets produce “jobless recoveries” and introduce more unemployment persistence.