chapter 9. discrimination definition types of evidence theories combating definition types of...
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Chapter 9. DiscriminationChapter 9. DiscriminationChapter 9. DiscriminationChapter 9. Discrimination
• Definition
• Types of Evidence
• Theories
• Combating
• Definition
• Types of Evidence
• Theories
• Combating
An economist’s definitionAn economist’s definitionAn economist’s definitionAn economist’s definition
• two people with same• productivity• preferences• but different group (race, sex, age)
• receive different outcomes in labor market • wages, hiring, promotion
• two people with same• productivity• preferences• but different group (race, sex, age)
• receive different outcomes in labor market • wages, hiring, promotion
• NOT the same as prejudice• prejudice is a cause of
discrimination• but discrimination can happen
without it
• NOT the same as prejudice• prejudice is a cause of
discrimination• but discrimination can happen
without it
• sex vs. race discrimination• w/ race there is segregation & a
total unwillingness to associate with that group• but men and women share
households
• sex vs. race discrimination• w/ race there is segregation & a
total unwillingness to associate with that group• but men and women share
households
Types of EvidenceTypes of EvidenceTypes of EvidenceTypes of Evidence
• Direct testimony• individual experiences• with a large number of victims, it
shows a pattern• with a small number, it hinges on
credibility• issue of unreported cases
• Direct testimony• individual experiences• with a large number of victims, it
shows a pattern• with a small number, it hinges on
credibility• issue of unreported cases
• Auditing• matched pairs of testers (identical
except for sex or race),
sent for interviews• may find discrimination in hiring,
entry wages,
but not in raises or promotion
• Auditing• matched pairs of testers (identical
except for sex or race),
sent for interviews• may find discrimination in hiring,
entry wages,
but not in raises or promotion
• Statistical evidence• wage regressions• control for worker differences
(education, experience, etc.)• estimate unexplained wage
differences by sex for firm, industry
• Statistical evidence• wage regressions• control for worker differences
(education, experience, etc.)• estimate unexplained wage
differences by sex for firm, industry
• large sample shows pattern• but
measurement problems, and
sample selection bias
(does not include women not hired)
• large sample shows pattern• but
measurement problems, and
sample selection bias
(does not include women not hired)
Theories of DiscriminationTheories of DiscriminationTheories of DiscriminationTheories of Discrimination
• With competitive, free markets with rational firms, consumers• no discrimination should exist
• With competitive, free markets with rational firms, consumers• no discrimination should exist
• why?• firms that discrimination will be
driven out of business by firms that do not• consumer that discriminate may end
up paying more• employees that discriminate may end
up with lower wages
• why?• firms that discrimination will be
driven out of business by firms that do not• consumer that discriminate may end
up paying more• employees that discriminate may end
up with lower wages
• So, if discrimination exists then• firms, consumers, employees have
a preference for it• markets are not competitive• imperfect information about
prospective workers
• So, if discrimination exists then• firms, consumers, employees have
a preference for it• markets are not competitive• imperfect information about
prospective workers
• Any theory of discrimination should explain• lower wages for women• occupational segregation• long run persistence
• Any theory of discrimination should explain• lower wages for women• occupational segregation• long run persistence
A Preference for DiscriminationA Preference for DiscriminationA Preference for DiscriminationA Preference for Discrimination
• Gary Becker, PhD dissertation• Nobel Prize winner (1992)
• Discrimination can occur due to preferences of• employer• employees• customers
• Gary Becker, PhD dissertation• Nobel Prize winner (1992)
• Discrimination can occur due to preferences of• employer• employees• customers
Employer DiscriminationEmployer DiscriminationEmployer DiscriminationEmployer Discrimination
• employer wants to• maximize profits AND• engage in discrimination due to
his/her prejudice• willing to accept lower profits in
order to discriminate
• employer wants to• maximize profits AND• engage in discrimination due to
his/her prejudice• willing to accept lower profits in
order to discriminate
• what happens?• pays “desired” employees more to
attract them and avoid hiring the undesired group• lower wages for undesired group• segregation between employers who
discriminate and those who do not
• what happens?• pays “desired” employees more to
attract them and avoid hiring the undesired group• lower wages for undesired group• segregation between employers who
discriminate and those who do not
• long run?• non discriminating employers have
lower costs, drive discriminating employers out of business• UNLESS there is not a lot of
competition
• long run?• non discriminating employers have
lower costs, drive discriminating employers out of business• UNLESS there is not a lot of
competition
Employee DiscriminationEmployee DiscriminationEmployee DiscriminationEmployee Discrimination
• employees dislike working with a certain group so• demand higher wages to work in
an integrated work site OR• less productive in an integrated
work site
• employees dislike working with a certain group so• demand higher wages to work in
an integrated work site OR• less productive in an integrated
work site
• Note: employers responding to employee prejudice, not their own• trying to avoid paying higher
wages• wanting to maximize productivity
• Note: employers responding to employee prejudice, not their own• trying to avoid paying higher
wages• wanting to maximize productivity
• employee discrimination would cause segregation
• lower wages for women?• if they appear to be less productive• (but really the prejudiced workers
are less productive)
• employee discrimination would cause segregation
• lower wages for women?• if they appear to be less productive• (but really the prejudiced workers
are less productive)
• long run?• this would persist as employee
attitudes change slowly over time• and if attitudes are widespread
• long run?• this would persist as employee
attitudes change slowly over time• and if attitudes are widespread
Customer DiscriminationCustomer DiscriminationCustomer DiscriminationCustomer Discrimination
• customers willing to pay higher price to be serviced by desired group• so firms avoid hiring undesired
group (to get a higher price) OR• firms pay undesired workers less
to make up for price cut
• customers willing to pay higher price to be serviced by desired group• so firms avoid hiring undesired
group (to get a higher price) OR• firms pay undesired workers less
to make up for price cut
• segregation• women waiters in cheaper restaurants,• male waiters in fancy restaurants• High % male representation in car sales,
repair
• lower wages?• if undesired worker paid less• or if crowding (ch. 6)
• segregation• women waiters in cheaper restaurants,• male waiters in fancy restaurants• High % male representation in car sales,
repair
• lower wages?• if undesired worker paid less• or if crowding (ch. 6)
• long run?• yes, since attitudes change slowly
• long run?• yes, since attitudes change slowly
Models w/out prejudiceModels w/out prejudiceModels w/out prejudiceModels w/out prejudice
• monopsony
• rent-seeking
• imperfect information
• monopsony
• rent-seeking
• imperfect information
Monopsony ModelMonopsony ModelMonopsony ModelMonopsony Model• = one buyer (of labor)
• employers band together• set below market wages in jobs with
high % female• motivated by desire to min. costs, max.
profits
• implies wage gap• Lemons v. City of Denver
• = one buyer (of labor)
• employers band together• set below market wages in jobs with
high % female• motivated by desire to min. costs, max.
profits
• implies wage gap• Lemons v. City of Denver
problemsproblemsproblemsproblems• monopsonies are local, not national• with increasing labor mobility,
move to area with better pay• but women ARE less mobile
• women’s labor supply is more elastic w.r.t. wages• more likely to not work if wage too low
• monopsonies are local, not national• with increasing labor mobility,
move to area with better pay• but women ARE less mobile
• women’s labor supply is more elastic w.r.t. wages• more likely to not work if wage too low
Rent-seeking modelsRent-seeking modelsRent-seeking modelsRent-seeking models
• one group bands together to improve their well-being at the expense of others
• desired group preserves best jobs for themselves
• motivated by greed, not prejudice
• but could be combined w/ prejudice
• one group bands together to improve their well-being at the expense of others
• desired group preserves best jobs for themselves
• motivated by greed, not prejudice
• but could be combined w/ prejudice
• more likely a model for racial discrimination• because men and women share
households,• but races are more segregated in
all areas
• more likely a model for racial discrimination• because men and women share
households,• but races are more segregated in
all areas
Imperfect Information ModelImperfect Information ModelImperfect Information ModelImperfect Information Model
• a.k.a. statistical discrimination
• employers have imperfect information on potential hires• do not know for certain their
individual productivity
• a.k.a. statistical discrimination
• employers have imperfect information on potential hires• do not know for certain their
individual productivity
• so increase their odds of a “good” hire by• taking average characteristics of
group (sex, race, etc.)• applying it to individual
• so increase their odds of a “good” hire by• taking average characteristics of
group (sex, race, etc.)• applying it to individual
exampleexampleexampleexample
• women have higher turnover rates on average
• it is expensive to train new workers
• employers end up preferring men, who are less likely to quit, ON AVERAGE
• women have higher turnover rates on average
• it is expensive to train new workers
• employers end up preferring men, who are less likely to quit, ON AVERAGE
• who is hurt?• women who are highly attached to
the labor force
• who benefits?• men who are not
• who is hurt?• women who are highly attached to
the labor force
• who benefits?• men who are not
Differences in average Differences in average characteristicscharacteristicsDifferences in average Differences in average characteristicscharacteristics
• may be perceived or actual
• some actual differences• women have more absences
(especially married women)• men more likely to have substance
abuse problem
• may be perceived or actual
• some actual differences• women have more absences
(especially married women)• men more likely to have substance
abuse problem
why isn’t this prejudice?why isn’t this prejudice?why isn’t this prejudice?why isn’t this prejudice?
• discrimination here is not due to dislike of certain group
• but desire to max. profits given the uncertainty about hiring
• if employer had perfect info, then he/she would not do this
• discrimination here is not due to dislike of certain group
• but desire to max. profits given the uncertainty about hiring
• if employer had perfect info, then he/she would not do this
the lawthe lawthe lawthe law
• in about 19 states, illegal to ask about marital, family status in an interview• and may be prohibited under federal
law too
• Technically, it is illegal for an interviewer to ask anything personal that is not directly job-related.
• in about 19 states, illegal to ask about marital, family status in an interview• and may be prohibited under federal
law too
• Technically, it is illegal for an interviewer to ask anything personal that is not directly job-related.
Indirect vs. direct discriminationIndirect vs. direct discriminationIndirect vs. direct discriminationIndirect vs. direct discrimination
• direct• discriminating among individuals
with same skills, preferences
• indirect• certain groups have fewer skills
because of discrimination
• direct• discriminating among individuals
with same skills, preferences
• indirect• certain groups have fewer skills
because of discrimination
Combating DiscriminationCombating DiscriminationCombating DiscriminationCombating Discrimination
• Government regulation
• Private sector alternatives• Government regulation
• Private sector alternatives
Government RegulationGovernment RegulationGovernment RegulationGovernment Regulation
• laws against discrimination
• pros:• improve efficiency, productivty• improve equity• works more quickly than changing
societal attitudes
• laws against discrimination
• pros:• improve efficiency, productivty• improve equity• works more quickly than changing
societal attitudes
• cons:• compliance costs• costs of litigation
• cons:• compliance costs• costs of litigation
Federal LawsFederal LawsFederal LawsFederal Laws
• Equal Pay Act of 1963
• The Civil Rights Act of 1964
• The ERA (not passed)
• Equal Pay Act of 1963
• The Civil Rights Act of 1964
• The ERA (not passed)
The Equal Pay Act of 1963The Equal Pay Act of 1963The Equal Pay Act of 1963The Equal Pay Act of 1963
• prohibits wage discrimination for women and men performing work for same employer of similar• skill• effort• responsibility• working conditions
• prohibits wage discrimination for women and men performing work for same employer of similar• skill• effort• responsibility• working conditions
• restrictive• how to define “similar”?
• covers almost all employers
• restrictive• how to define “similar”?
• covers almost all employers
• exceptions if wages differ by sex due to• seniority system• merit pay system• any factor other than sex
• exceptions if wages differ by sex due to• seniority system• merit pay system• any factor other than sex
The Civil Rights Act of 1964The Civil Rights Act of 1964The Civil Rights Act of 1964The Civil Rights Act of 1964
• created EEOC to enforce the law
• prohibits discrimination on basis of race, sex, color, religion, national origin
• Title VII – employment
• Title IX -- education
• created EEOC to enforce the law
• prohibits discrimination on basis of race, sex, color, religion, national origin
• Title VII – employment
• Title IX -- education
Title VIITitle VIITitle VIITitle VII
• hiring/firing/layoff
• compensation/benefits
• job title/promotions/tranfers
• ads/recruitment
• training/facilities
• disability leave
• all employers with > 15 workers
• hiring/firing/layoff
• compensation/benefits
• job title/promotions/tranfers
• ads/recruitment
• training/facilities
• disability leave
• all employers with > 15 workers
• exceptions• if sex, religion is legitimate job
requirement• “BFOQ” • race is not considered a BFOQ• EEOC vs. Hooters (1995)
• exceptions• if sex, religion is legitimate job
requirement• “BFOQ” • race is not considered a BFOQ• EEOC vs. Hooters (1995)
sexual harassmentsexual harassmentsexual harassmentsexual harassment
• illegal under title VII
• “quid pro quo”• sex-for-job, raise, promotion
• hostile work environment• behavior of coworkers make
interferes with job
• illegal under title VII
• “quid pro quo”• sex-for-job, raise, promotion
• hostile work environment• behavior of coworkers make
interferes with job
back to interview questionsback to interview questionsback to interview questionsback to interview questions
• questions about marital, family status• may violate title VII if used against
women and not against men
• questions about marital, family status• may violate title VII if used against
women and not against men
pregnancy based discriminationpregnancy based discriminationpregnancy based discriminationpregnancy based discrimination
• pregnancy, childbirth and related disabilities must be treated same as other disabilities/illnesses in employer policy
• pregnancy, childbirth and related disabilities must be treated same as other disabilities/illnesses in employer policy
Title IXTitle IXTitle IXTitle IX
• education programs receiving federal aid
• implications for sports programs
• education programs receiving federal aid
• implications for sports programs
Title IX & sportsTitle IX & sportsTitle IX & sportsTitle IX & sports
• 1972• < 30,000 female NCAA athletes
• 2000• > 150,000 NCAA female athletes
• 1972• < 30,000 female NCAA athletes
• 2000• > 150,000 NCAA female athletes
college sports programscollege sports programscollege sports programscollege sports programs
• schools comply by• % female athletes proportional to
enrollment• history of expanding sports
opportunities for females
• schools comply by• % female athletes proportional to
enrollment• history of expanding sports
opportunities for females
controversycontroversycontroversycontroversy
• are low-profile men’s sports cut to comply with Title IX?• due to large spending on sports
like men’s basketball & football
• are low-profile men’s sports cut to comply with Title IX?• due to large spending on sports
like men’s basketball & football
notenotenotenote
• no school has ever lost federal aid for noncompliance with Title IX• no school has ever lost federal aid
for noncompliance with Title IX
Civil Rights ActCivil Rights ActCivil Rights ActCivil Rights Act
• does not prohibit discrimination based on• sexual orientation• marital status• family status
• but many states and municipalities do
• does not prohibit discrimination based on• sexual orientation• marital status• family status
• but many states and municipalities do
The Equal Rights AmendmentThe Equal Rights AmendmentThe Equal Rights AmendmentThe Equal Rights Amendment
• Section 1. Equality of rights under the law shall not be denied or abridged by the United States or by any state on account of sex.
• Section 2. The Congress shall have the power to enforce, by appropriate legislation, the provisions of this article.
• Section 3. This amendment shall take effect two years after the date of ratification.
• Section 1. Equality of rights under the law shall not be denied or abridged by the United States or by any state on account of sex.
• Section 2. The Congress shall have the power to enforce, by appropriate legislation, the provisions of this article.
• Section 3. This amendment shall take effect two years after the date of ratification.
ERAERAERAERA
• proposed as 28th Amendment to the U.S. Constitution• passed in 1972 by Congress• must be ratified by 38 states (3/4)• only ratified by 35 states by 1982
deadline• (later 5 states rescinded)
• proposed as 28th Amendment to the U.S. Constitution• passed in 1972 by Congress• must be ratified by 38 states (3/4)• only ratified by 35 states by 1982
deadline• (later 5 states rescinded)
why is it necessary?why is it necessary?why is it necessary?why is it necessary?
• Civil Rights Act, Equal Pay Act• they are laws by congress• could easily be changed
• Civil Rights Act, Equal Pay Act• they are laws by congress• could easily be changed
• 14th Amendment (1868) • originally did not apply to sex, only to
race (“male citizens”)
• courts have not consistently applied law to guarantee equal protection under law to women
• 1873 Court upheld ban on women lawyers
• 1981 Court upheld law allowing only men to be charged with statutory rape
• 14th Amendment (1868) • originally did not apply to sex, only to
race (“male citizens”)
• courts have not consistently applied law to guarantee equal protection under law to women
• 1873 Court upheld ban on women lawyers
• 1981 Court upheld law allowing only men to be charged with statutory rape
Why do people oppose it?Why do people oppose it?Why do people oppose it?Why do people oppose it?
• would it lead to taxpayer-funded abortion?
• unisex bathrooms?
• female draft?
• homosexual marriage?
• alimony & child support?
• would it lead to taxpayer-funded abortion?
• unisex bathrooms?
• female draft?
• homosexual marriage?
• alimony & child support?
• 18 states have ERA as part of their state Constitution• 18 states have ERA as part of their
state Constitution
new life for the ERA?new life for the ERA?new life for the ERA?new life for the ERA?
• Supreme Court rulings suggest that Congress may extend deadline for state ratification
• All 35 previous ratifications would hold• need 3 more states
• Supreme Court rulings suggest that Congress may extend deadline for state ratification
• All 35 previous ratifications would hold• need 3 more states
Private MethodsPrivate MethodsPrivate MethodsPrivate Methods
• Unions
• Networking
• Arbitration
• Unions
• Networking
• Arbitration
UnionsUnionsUnionsUnions
• can help eliminate inequities with• job classifications• performance standards• pay scales• grievance procedures
• can help eliminate inequities with• job classifications• performance standards• pay scales• grievance procedures
• employee-to-employee harassment?• tougher for a union to handle• whose side to take?
• employee-to-employee harassment?• tougher for a union to handle• whose side to take?
EEOC v. Mitsubishi Motors, 1996EEOC v. Mitsubishi Motors, 1996EEOC v. Mitsubishi Motors, 1996EEOC v. Mitsubishi Motors, 1996
• 29 women (later 300), UAW members
• charged sexual harassment on the assembly line
• multi-million dollar settlement
• 29 women (later 300), UAW members
• charged sexual harassment on the assembly line
• multi-million dollar settlement
NetworkingNetworkingNetworkingNetworking
• women’s groups designed to promote women in business
• promoting mentors for women
• equivalent of rent-seeking behavior for women?
• women’s groups designed to promote women in business
• promoting mentors for women
• equivalent of rent-seeking behavior for women?
ArbitrationArbitrationArbitrationArbitration
• settling disputes with a third party• out of court
• cheaper than litigation• but may favor employers
• employer may require this as a condition of employment• Wall Street
• settling disputes with a third party• out of court
• cheaper than litigation• but may favor employers
• employer may require this as a condition of employment• Wall Street
1996 Smith Barney1996 Smith Barney1996 Smith Barney1996 Smith Barney
• class action lawsuit to get around arbitration requirement
• alleged hostile work environment• “Boom-boom room”
• grew to over 2000 women in brokerage industry
• class action lawsuit to get around arbitration requirement
• alleged hostile work environment• “Boom-boom room”
• grew to over 2000 women in brokerage industry
Chapters 6-9, revisitedChapters 6-9, revisitedChapters 6-9, revisitedChapters 6-9, revisited
• what does the gender earnings gap mean?
• explain up to 60% controlling for• occupation• human capital• job characteristics
• what does the gender earnings gap mean?
• explain up to 60% controlling for• occupation• human capital• job characteristics
• the remainder?• measurement error• direct discrimination
• the remainder?• measurement error• direct discrimination
The policy issueThe policy issueThe policy issueThe policy issue
• is the gap about discrimination?• both indirect and direct
• or is it about women making different choices?• different values/preferences?• different constraints?
• is the gap about discrimination?• both indirect and direct
• or is it about women making different choices?• different values/preferences?• different constraints?
Vicky LovellVicky LovellInstitute for Women’s Policy ResearchInstitute for Women’s Policy ResearchVicky LovellVicky LovellInstitute for Women’s Policy ResearchInstitute for Women’s Policy Research
“The question is how do we interpret the fact that women don’t have as much occupational choice as men do?....
“The question is how do we interpret the fact that women don’t have as much occupational choice as men do?....
“… Men choose to have children and choose to be admitted to the work force because they’ve already established that women will be doing the caring work, relieving them of the work-family conflict…”
“… Men choose to have children and choose to be admitted to the work force because they’ve already established that women will be doing the caring work, relieving them of the work-family conflict…”
“…Society has narrowed women’s choices in a way that it hasn’t narrowed men’s choices.”
“…Society has narrowed women’s choices in a way that it hasn’t narrowed men’s choices.”
SocietySocietySocietySociety
• earnings gap is NOT about “men bad, women good”
• sometimes women are their own worst enemies:• Phyllis Schaefly led ERA
opposition• SAHM vs. WOHM debate
• earnings gap is NOT about “men bad, women good”
• sometimes women are their own worst enemies:• Phyllis Schaefly led ERA
opposition• SAHM vs. WOHM debate