Economic grounds for affirmative action: The evidence on architects and engineers in South Florida

Using data developed for, and presented to, the US District Court, this study evaluates the performance of women-, African-American-, and Hispanic-owned firms vis-à-vis firms owned by neither women nor minorities in three different South Florida markets: architecture, structural engineering, and civil engineering. After controlling for the influence of experience, size, and location, three of the most commonly used determinants of firms' earnings, the empirical results suggest that the three markets do not convert firms' characteristics into economic outcomes in the same manner for women and Hispanic owners as for owners who are neither women nor minorities.     

WHO FAVOURS THE GAY COMMUNITY? EXPERIMENTAL EVIDENCE USING CHARITABLE DONATIONS

In this paper, we conduct an experiment to determine the characteristics of individuals who are more likely to donate to a gay charity. After filling out a questionnaire that includes information on gender, ethnicity, and religiosity, as well as other factors, Israeli undergraduate students are asked to choose two out of four options: participation in a lottery, donation to a gay charity, donation to a religious charity, and donation to an education‐focused charity. Our most robust findings are that females and the less religiously observant are more likely to donate to the gay charity.     

Book Reviews

Books reviewed:
Erik Berglöf and Romesh Vaitilingam, Stuck in Transit: Rethinking Russian Economic Reform
Mitko Dimitrov, Wladimir Andreff and László Csaba, Economies in transition and the variety of capitalisms: features, changes, convergence
Vincent Edwards, Gennady Polonsky & Avgust Polonsky, The Russian Province after Communism. Enterprise Continuity and Change
Christian von Hirschhausen and Jürgen Bitzer, The Globalization of Industry and Innovation in Eastern Europe
Mario I. Blejer & Marko Skreb, Financial Sector Transformation. Lessons from Economies in Transition     

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.     

Wage Assimilation of Foreigners: Which Factors Close the Gap? Evidence From Germany

This study analyzes the development of the wages of male foreign workers from all important sending countries across time using longitudinal employment register data. A cohort analysis of the individuals entering the German labor market in the years 1999 to 2001 indicates that the raw wage gap of migrants compared to native Germans decreases by 14 log percentage points in the first eight years. The results of a decomposition method based on fixed effects regression models give evidence that this wage adjustment is mostly due to time‐varying observable characteristics. Selective return migration, and the trend effects play no role for the aggregate. We find that wage assimilation happens mainly through three channels: first, through the accumulation of firm‐specific human capital, which explains approximately 40 percent; second, search gains are approximately the same order of magnitude; and third, the accumulation of general human capital explains one‐fifth of the assimilation. We further demonstrate that the importance of these channels differs substantially by the origin groups.     

REASSESSING SEGMENTATION IN THE LABOUR MARKET: AN APPLICATION FOR ITALY 1995–2004

The aim of this paper is to test for the presence of dualism in a standard wage regression. The disparity in wages between primary and secondary workers, according to labour market segmentation theory, is not provided by worker characteristics, but rather by job characteristics. A standard way to assess this situation is by looking at the estimated coefficients in a standard regression for comparable workers across different labour market segments. In an attempt to avoid arbitrary modelling choices, we deploy mixture regression methods which allow for endogenous determination of the number of existing labour market segments. Using Italian data, our modelling strategy outlines stark differences in returns to human capital between homogeneous workers in different markets. Thus, future policies should consider these findings when implementing labour market measures.     

The Ethnic Employment and Income Gap in Sweden: Is Skill or Labor Market Discrimination the Explanation?*

This study uses a cognitive test score, the Swedish Military Enlistment test taken at age 18, to identify whether the ethnic employment and income gap in Sweden is caused by a pre‐market skill gap and/or ethnic discrimination. The employment gap and income gap are estimated for males born in Sweden with different ethnic backgrounds: their parents were born in Sweden or in southern Europe or outside Europe. Controlling for the cognitive test score does not affect the ethnic employment gap, and for incomes the ethnic income gap almost disappears.     

Do Immigrants Affect Firm‐Specific Wages?*

We propose and test a novel effect of immigration on wages. Existing studies have focused on the wage effects that result from changes in the aggregate labour supply in a competitive labour market. We argue that if labour markets are not fully competitive, immigrants might also affect wage formation at the most disaggregate level – the workplace. Using linked employer?employee data, we find that an increased use of low‐skilled immigrant workers has a significantly negative effect on the wages of native workers at the workplace – also when controlling for potential endogeneity of the immigrant share using both fixed effects and instrumental variables.