Economics
Discrimination in the Labour Market
Discrimination in the labor market refers to the unfair treatment of individuals based on characteristics such as race, gender, age, or disability. This can manifest in hiring, promotion, and wage decisions. It can lead to unequal opportunities and outcomes for different groups of workers, ultimately impacting the overall efficiency and equity of the labor market.
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12 Key excerpts on "Discrimination in the Labour Market"
eBook - ePub- Stephen W. Smith(Author)
- 2003(Publication Date)
- Routledge(Publisher)
6 Labour market discrimination INTRODUCTIONThe economic analysis of discrimination focuses upon the possibility that significant wage and employment differences persist between groups within the labour force that are not justified by differential productivity and human capital investment. Do characteristics such as gender and race, which are economically irrelevant per se, significantly affect the labour market outcomes for individual labour suppliers? If so then the impact of gender and racial characteristics on earnings and employment outcomes can be regarded as labour market consequences of discrimination. In order to address the phenomenon of discrimination we need to examine economic theories of discrimination and the evidence provided by empirical studies of the topic. At the theoretical level there are two main schools of economic thought regarding discrimination. One is the neoclassical theory stemming from the work of Becker (1957) which is based on the notion that prejudice is expressed in discriminatory tastes on the part of employers, workers and consumers. The alternative is the segmented labour market approach, which can trace its heritage back to the theory of non-competing groups in the work of J.S. Mill (1885). The segmented labour market approach essentially maintains that the labour market is split into sectors including delineations according to sex and racial origin, and that there is very little interaction between those sectors. Examples of this approach are the ‘job crowding’ and the ‘dual labour market’ hypotheses.In this chapter we set out the neoclassical and segmented market approaches and survey some of the empirical evidence in the light of statistical data indicating discrimination. As a special focus to our treatment of discrimination we will assess the effectiveness of equal pay and opportunities legislation and consider the case for ‘comparable worth’ policies. We are aware that our coverage of the economics of discrimination concentrates on sex discrimination. Racial discrimination is not ignored, it is covered in a separate section later in the chapter. We regret that the issue of the labour market experiences of disabled workers receives no systematic attention, although many of the general conclusions can be applied to disabled labour suppliers. For disabled workers discrimination takes the form of earnings and employment differentials over and above what appears to be justified by any legitimate productivity differentials or additional costs incurred by firms providing special facilities specifically for disabled recruits.
eBook - PDFIntroduction to Economics
Social Issues and Economic Thinking
- Wendy A. Stock(Author)
- 2013(Publication Date)
- Wiley(Publisher)
The Economist Toolkit PART I SECTION III Social Issues 311 19 The Economics of Labor Market Discrimination After studying this chapter, you should be able to: • Describe the sources of earnings differences among people • Define discrimination • Summarize the predominant economic models of discrimination • Model the effects of discrimination • Discuss the main antidiscrimination policies in the U.S. and the research findings on the effectiveness of these policies S ince the U.S. Bureau of Labor Statistics began tracking the relative earnings of men and women in 1979, the earnings of full-time working women have consistently been lower than the earnings of their male counterparts. Similarly, the average earnings of blacks and Hispanics are lower than the average earnings of whites. Job applicants with names more com- mon among African Americans are significantly less likely to land job interviews than applicants with white-sounding names. Married women earn less than single women, but married men earn more than single men. Men are more likely than women to be hired as waiters at expensive res- taurants, but women are more likely than men to be hired as waitresses at low-end restaurants. Labor market discrimination can take many forms. Employment discrimination involves not hiring, promoting, or retaining workers because of their race, sex, or other demographic charac- teristics. Allowing men but not women in the same jobs access to overtime work or providing flex- ible schedules to young but not older workers in the same jobs are also examples of employment © Jacob Wackerhausen/iStockphoto 3 1 2 C H A P T E R 1 9 T h e E c o n o m i c s o f L a b o r M a r k e t D i s c r i m i n a t i o n discrimination. Wage discrimination occurs when equally productive workers in the same job are paid different wages based on a characteristic unrelated to productivity.
- M. Ronald Buckley, Jonathon R. B. Halbesleben, Anthony R. Wheeler, M. Ronald Buckley, Jonathon R. B. Halbesleben, Anthony R. Wheeler(Authors)
- 2016(Publication Date)
- Emerald Group Publishing Limited(Publisher)
We further synthesize theory and evidence that guide efforts to reduce discrimination and avoid its consequences. Overall, this review fulfills dual purposes to inform and inspire practical and scho-larly efforts to understand and eliminate discrimination in the workplace. DEFINING WORKPLACE DISCRIMINATION The United Nations’ International Labor Organization (2015) defined employment discrimination as “any distinction, exclusion or preference made on the basis of race, colour, sex, religion, political opinion, national extraction or social origin, which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation.” This 102 HO KWAN CHEUNG ET AL. conceptualization reflects global recognition of the persistence of unfair employment experiences of people from a variety of social groups. It is also consistent with the social psychological distinctions between discrimination, prejudice, and stereotypes that place discrimination as the behavioral mani-festation of biased cognitions (stereotypes) and attitudes (prejudice) toward individuals as a function of their social group membership. Yet, this definition is also limited in two important ways. Indeed, Shen and Dhanani (2015) clarified that, “the research literature has generally adopted a broader conceptualization of workplace discrimination, includ-ing behaviors outside of organizational practices (e.g., interpersonal treat-ment by coworkers and customers) as well as encompassing discrimination based on social characteristics that are not always legally protected (e.g., weight, sexual orientation, physical attractiveness).” Thus, the U.N. defini-tion is first limited by its omission of other likely targets of discrimination such as gay and lesbian people, people with disabilities, and ex-convicts (see Ruggs et al., 2013 ).
eBook - ePub- Peter Sloane, Paul Latreille, Nigel O'Leary(Authors)
- 2013(Publication Date)
- Routledge(Publisher)
Questions- Discrimination may originate from employers, employees or their representatives and from consumers, and outcomes may vary according to the originator. Thus, under certain assumptions, employer discrimination, unless prevented by legislation, may give rise to wage differences. Employee discrimination may result in segregation on the basis of firms or occupations. Consumer discrimination may lead to price differences, but, unlike in the case of employer discrimination, may not be weakened by product market competition.
- Many studies have attempted to estimate the level of discrimination using a residual approach in which earnings are decomposed into differences arising from varying endowments of human capital and in coefficients, or prices paid for a given endowment of human capital. This gives rise to an index number problem, depending on which group is used as the basis of comparison. The residual may be influenced by specification error, if, for instance, there are between-group taste differences.
- Explain what is meant by a dynamic shortage of labour. Why is this likely to be common?
eBook - PDF- Thomas Hyclak, Geraint Johnes, Robert Thornton, , Thomas Hyclak, Thomas Hyclak, Geraint Johnes, Robert Thornton(Authors)
- 2020(Publication Date)
- Cengage Learning EMEA(Publisher)
3. What kinds of policies are best suited to eliminate labor market discrimination? Since the middle of the twentieth century, many countries have instituted a variety of policies designed to eliminate wage and employment discrimination: for example, equal pay and employment legislation, affirmative action, and “pay equity” (comparable worth) laws. But which ones are best designed to eradicate discrimination? To answer these questions and to help us understand why, how, and with what effects employers discriminate, we turn to the theory of discrimination. Economists have formu- lated several such theories, and we examine them in the following sections. Personal Prejudice Theory Economic theories of discrimination owe their origins principally to Gary Becker. 16 In his groundbreaking work on personal prejudice theory, Becker suggested that we can assign a monetary dimension to labor market discrimination. According to Becker, an individual with a propensity to discriminate against members of a certain group can be said to have a “taste for discrimination” (or, simply, a prejudice). That is, the individual acts as if he or she were willing to pay some amount not to be associated with members of this group. Note that this does not in any way help us explain discrimination—but it does help us understand the ramifications of it. To explain Becker’s model more fully, let’s look at how an employer who possesses a “taste for discrimination” in the hiring of female workers would act. This employer could hire a female worker or a male worker at wage w. However, the employer acts as if the female wage were higher by some proportion d, where d is a measure of the employer’s taste for discrimination against women (we could also call it the discrimination coefficient). In other words, the employer acts as if the female’s wage were w(1 1 d). If d is small, so also is the employer’s taste for discrimination, and vice versa if d is large.
eBook - PDF- William Shaw, Vincent Barry(Authors)
- 2015(Publication Date)
- Cengage Learning EMEA(Publisher)
Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require • • • THE MEANING OF JOB DISCRIMINATION To discriminate in employment is to make an adverse decision regarding an employee or a job applicant based on his or her membership in a certain group. 4 More specifically, job discrimination occurs when (1) an employment decision in some way harms or disadvantages an employee or a job applicant; (2) the decision is based on the person’s membership in a certain group rather than on individual merit; and (3) the decision rests on prejudice, false stereotypes, or the assumption that the group in question is in some way inferior and thus does not deserve equal treatment. Because historically most dis-crimination in the American workplace has been aimed at women and at minorities such as African Americans and Hispanics, the following discussion focuses on those groups. Job discrimination can take different forms. It can be individual or institutional, and it can be either intentional or unwitting. Individuals, for instance, sometimes intention-ally discriminate out of personal prejudice or on the basis of stereotypes. For example, an executive at Rent-A-Center, the nation’s largest rent-to-own furniture and home appli-ance company, purposely disregarded job applications from women because he believed that they “should be home taking care of their husbands and children.” 5 Individuals also may discriminate because they unthinkingly or unconsciously accept traditional practices or stereotypes. For example, suppose that the merit-pay recommendations of a Walmart manager are influenced by his implicit assumption that male employees are career oriented and have families to support, whereas female employees are there just to make a little extra money.
eBook - ePubRacial Discrimination
Institutional Patterns and Politics
- Masoud Kamali(Author)
- 2010(Publication Date)
- Taylor & Francis(Publisher)
not employing immigrants and thus ‘protecting’ them from such reactions and experiences.Assumptions Concerning the ‘Others’
Discrimination is a process of noting, perceiving, constructing a difference or distinction between members of an in-group (‘Us’) and members of an out-group (‘Them’) and deciding that these differences should qualify for differential treatment and justify the exclusion of the out-groups. In our study of the eight countries’ labour markets, we found that in daily interactions, migrants and members of some minorities are stereotyped as lacking language and ‘cultural competence,’ or as being unreliable, lazy, devious, and criminal. On the basis of such judgements, they are then ‘sentenced’ either to unemployment or to menial, hard, repetitive, dirty, and low paid tasks; in both ways they are denied equal opportunities with ‘natives’ when it comes to accessing a job or position.In the best case scenario, specific ‘skills’ or ‘talents’—such as being flexible, being able to take on hard workloads or the worst working times—become attributed to migrants or members of some minorities. In Europe, these ‘skills’ or ‘talents’ are then referred to in order to justify why they are given the jobs which hardly any ‘natives’ want to do. There are similarities between Europe and the United States in this respect. Tilly and Tilly (1994) show that American employers attribute specific skills, work experience, and traits to specific ethnic groups, and, based on these attributions, they decide against hiring them at all or assign them to different departments in their enterprises which results in ethnic segregation within these enterprises. Comparable to this would be the conviction, spread throughout much of Europe, that Turks are only suitable for unskilled jobs in industry, while Albanians or Ukrainians are willing to take on dirty or backbreaking, low-paid seasonal jobs in agriculture (picking strawberries, wine grapes, asparagus, or apples) or the construction industry. Another belief that is found in our study is that even in the irregular labour market there are stereotyped and discriminatory assumptions among ‘Europeans’ about the ‘Others’ that influence the latter’s chances in the labour market. For example, many believe that Polish women make ‘great nurses,’ whereas women from the Philippines are ideal as loving and caring babysitters.
eBook - PDFApartheid In Theory And Practice
An Economic Analysis
- Mats Ove Lundahl(Author)
- 2019(Publication Date)
- Taylor & Francis(Publisher)
3 Marshall (1974) surreys the neoclassical, the dual and the radical ttaditions in discrimination theory. 4 Differences in the tastes of discrimination between different employers, tastes of disc~on of employees, and customs have been given as causes of segrega-tion. 5 Krueger (1963), pp. 481-86. Economic Discrimination in a Two-Good Model 41 6 Thurow (1969). 7 Taking· the partial derivatives of white and black incomes (keeping relative prices constant) with respect to capital exports, using (5) and (6), yields and ar 8 JlsA '.'.v =-P--2KX >0, on.x dKx if the return on capital is equal between the two sectors in the absence of discrimina-tion. 8 Stiglitz (1973), pp. 288-89. References Becker, G. S., 1971. The Economics of Discrimination. Second edition. Chicago. Krueger, A. 0., 1963. 'The Economics of Discrimination', Journal of Political Econ-omy 11. Marshall, R., 1974. 'The Economics of Racial Discrimination: A Survey', Journal of Economic literature 12. Stiglitz, J. E., 1973. 'Approaches to the Economics of Discrimination', American Economic Review 63. Thurow, L. C., 1969. The Economics of Poverty and Discrimination. Washington, D.C. 3 A Crowding Approach to Discrimination with Decreasing Returns to Scale In her book The Economics of Sex Discrimination Janice Fanning Madden makes a distinction between 'wage discrimination, which occurs when wage differentials are not based on relative productivity differ-ences', and 'occupational discrimination, which occurs when criteria other than productivity determine the quantity of a factor employed in a given occupation',1 and criticizes the 'competitive' approach to the ana-lysis of discrimination to a problem of wage discrjmination'2 for restrict-ing 'the problems of discrimination to a problem of wage discrimina-tion' ,3 while neglecting 'discrimination which created entry barriers to high paying occupations.
- M. Noon, E. Ogbonna, M. Noon, E. Ogbonna(Authors)
- 2000(Publication Date)
- Palgrave Macmillan(Publisher)
‘Difference theories’ of discrimination can be subdivided into two further subgroupings: theories which focus on socio-psychological and physiological differences (Riger and Galligan, 1980), and those con- cerned with an economic explanation (Blau and Ferber, 1987). It could be argued that theories based on psychological and physiological differ- ences are pertinent to age discrimination. In particular, the way in which the ageing process leads to physical and mental deterioration may inform work-related judgements about older and younger workers which could be construed as being either fair (based on genuine differ- ences) or unfair (based on unwarranted stereotypes). A key economic explanation of differences between groups is ‘human capital theory’ (Blau and Ferber, 1987) which suggests that individuals are rewarded for their investment in education and job training. Differ- ential treatment arises because some groups (for example, women) choose to accept a wage while others (for example, men) invest in acquir- ing skills and knowledge to qualify for higher-paying jobs. The extent to which criteria such as ‘recently qualified’ and ‘outdated knowledge’ are applied as judgements in determining the employability of older and younger workers is an aspect of age discrimination which perhaps resonates with aspects of ‘human capital theory’. The second theoretical perspective, focusing on discriminatory treat- ment, can also be reduced to an economic and a socio-psychological perspective. Economic theories of discrimination are linked to a process of market substitution (Becker, 1957) in which women and minorities are hired ‘at a wage discount large enough to compensate for the loss of utility or level of discomfort associated with employing them’ (Morrison and Von Glinow, 1990: 202).
eBook - PDFLaw and Economics
An Introductory Analysis
- Werner Z. Hirsch(Author)
- 2014(Publication Date)
- Academic Press(Publisher)
372 11 DISCRIMINATION LAW ket and hire the minorities at cheaper wages, earning excess profits until any wage differentials not actually based on differences in productivity were eliminated. All these models are developed within the neoclassical framework. They are not mutually exclusive and can be combined to present a comprehensive explanation for the existence and persistence of wage and employment discrimination under different conditions. These models, however, are by no means universally accepted as explanations of labor market discrimination. Models of labor market segmentation provide a variety of alternative explanations to those offered by neoclas-sical models. 38 They emphasize the imperfect nature of the labor mar-ket, in which the labor market is essentially divided into different sub-markets for different groups of individuals. These authors are not convinced by neoclassical explanations of the persistence of discrimina-tion in competitive markets, decreases in black male labor market partic-ipation rates, and the ability of the models to account for other circum-stances as well. The possibility of group discrimination, for example, the direct exclu-sion of nonwhites from trade unions, may restrict blacks from entering certain markets, which probably has a more adverse effect on black unemployment than wage differentials. Also, strict occupational licens-ing laws for such professions as taxi drivers and beauticians, though designed in theory to protect public health and safety, may perpetuate racial earnings differences, because minority group members may have a more difficult time obtaining licenses. 39 Whatever the causes of racial discrimination, its existence can place certain groups in society at a substantial disadvantage. That disadvan-tage is increased, for example, in a city's economic system, while at the same time, cities may offer greater opportunities to rectify the situation.
- John S. Heywood, James H. Peoples, John S. Heywood, James H. Peoples, James H. Peoples(Authors)
- 2006(Publication Date)
- SUNY Press(Publisher)
———. “Labor Market Discrimination against Women with Disabilities.” Indus- trial Relations 34 (1995): 555–77. ———. “Labor Market Discrimination against Men with Disabilities.” Journal of Human Resources 29 (1994): 1–19. Becker, Gary. The Economics of Discrimination. Chicago: University of Chicago Press, 1957. Bodvarsson, Örn B., and Mark D. Partridge. “A Supply and Demand Model of Co-Worker, Employer and Customer Discrimination.” Labour Economics 8 (2001): 389–416. Bound, John, and Timothy Waidman. “Accounting for Recent Declines in Em- ployment Rates among the Working-Age Disabled.” Journal of Human Re- sources 37 (2002): 231–50. Cotton, Jeremiah. “On the Decomposition of Wage Differentials.” Review of Eco- nomics and Statistics 70 (1988): 236–43. DeLeire, Thomas. “Changes in Wage Discrimination against People with Disabil- ities: 1984–1993.” Journal of Human Resources 36 (2001): 144–58. ———. “The Wage and Employment Effects of the Americans with Disabilities Act.” Journal of Human Resources 35 (2000): 693–715. Heckman, James J. “Sample Selection Bias as a Specification Error with an Appli- cation to the Estimation of Labor Supply Functions.” In Female Labor Supply, ed. J. P. Smith, 206–48. Princeton, NJ: Princeton University Press, 1980. Hendricks, Wallace, ChrisAnn Schrio-Geist, and Emir Broadbent. “Labor Market Outcomes for Persons with Long-Term Disabilities and College Educa- tions.” Industrial Relations 36 (1997): 46–60. Holzer, Harry J., and Keith R. Ihlanfeldt. “Customer Discrimination and Employ- ment Outcomes for Minority Workers.” Quarterly Journal of Economics 113 (1998): 835–67. 152 Marjorie L. Baldwin Hotchkiss, Julie. The Labor Market Experiences of Workers with Disabilities: The ADA and Beyond. Kalamazoo, MI: W.E Upjohn Institute, 2003. Johnson, William G., and James Lambrinos. “The Effect of Prejudice on the Wages of Disabled Workers.” Policy Studies Journal 15 (1987): 571–90.
eBook - PDFJust Who Loses?
Discrimination in the United States, Volume 2
- Samuel Lucas(Author)
- 2013(Publication Date)
- Temple University Press(Publisher)
7 Job Quality and Discrimination O btaining a job is important, but the quality of the job obtained, its complex constellation of characteristics, is also of intrinsic importance. Sociologists have shown that the socioeconomic and nonsocioeconomic characteristics of jobs have wide-ranging effects, playing an important role in persons’ own intellectual develop-ment (e.g., Kohn and Schooler 1983), political participation (e.g., Verba and Nie 1972), life expectancy (e.g., Kitagawa and Hauser 1973), and child-rearing attitudes (e.g., Kohn, Slomczynski, and Schoenbach 1986), as well as their children’s educational attainment (e.g., Hauser, Tsai, and Sewell 1983), course placement (e.g., Lucas and Gamoran 2002), college entry (e.g., Lucas 2001), and more (e.g., Faris and Dunham 1939). The importance of the socioeconomic and nonsocio-economic dimensions of jobs is undeniable. Given the importance of jobs, discerning the role of discrimination in allocating individual workers to jobs and in constructing the compo-sition of occupations is crucial for understanding how discrimination may ramify through the experiences of those exposed to it. The unde-niable importance of job characteristics and the centrality of work in society make studying the role of discrimination imperative. Yet several challenges confront the effort to study job quality. These challenges be-gin with the dizzying array of job characteristics that exist. Hence, it is useful to begin with that question: Given the dimension-laden phenom-enon of occupations, how might we investigate the role of discrimina-tion in occupational attainment and composition? 208 / Chapter 7 Dimensions of Jobs and Occupations Each occupation, or job, has several dimensions. Parenthetically, while technically jobs and occupations are not the same, to ease the presentation I use the terms interchangeably. A job may offer more or less autonomy— that is, opportunity for an incumbent to control his or her own work.
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