Employer Taste for Discrimination

Slides:



Advertisements
Similar presentations
Gender, Race, and Ethnicity in the Labor Market
Advertisements

Copyright © 2009 Pearson Education, Inc Topic 9 (Chapter 15) Inequality in Earnings.
Chapter 13: Aggregate Supply
Chapter 16 Economic Inequality
Graph copyright © 2003 by Pearson Education, Inc. Trend in the Overall Unemployment Rate Feb 2003: 5.8%
CH. 12: GENDER, RACE, AND ETHNICITY IN THE LABOR MARKET Chapter objectives:  Document levels and trends in earnings differentials by gender and race.
Economics 103 Lecture # 14 The Labor Market. We’ve already discussed how the demand for labor comes from the marginal product of labor. This is often.
Copyright © 2009 Pearson Education, Inc Topic 7 (Chapter 12) Gender and Race in Pay.
Chapter 2 Overview of the Labor Market. Copyright © 2003 by Pearson Education, Inc.2-2 Figure 2.1 Labor Force Status of the U.S. Adult Civilian Population,
Chapter 12 Gender, Race, and Ethnicity in the Labor Market.
Chapter 8 The Wage Structure Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Labor Economics, 4 th edition.
Earnings and Discrimination Chapter 19 Copyright © 2001 by Harcourt, Inc. All rights reserved. Requests for permission to make copies of any part of the.
Ch. 18: Economic Inequality
Copyright © 2009 Pearson Education, Inc Topic 1. Chapter 2 Overview of Labor Market.
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. The Market for the Factors of Production The demand for a factor of production.
Copyright © 2009 Pearson Education, Inc. Chapter 5 Frictions in the Labor Market.
MODERN LABOR ECONOMICS THEORY AND PUBLIC POLICY CHAPTER Modern Labor Economics: Theory and Public Policy, Twelfth Edition Ronald G. Ehrenberg Robert S.
Chapter 14 Inequality in Earnings. Copyright © 2003 by Pearson Education, Inc.14-2 Figure 14.1 Earnings Distribution with Perfect Equality.
McTaggart, Findlay, Parkin: Microeconomics © 2007 Pearson Education Australia Chapter 18: Economic Inequality and Redistribution.
Chapter 9 Labor Economics. Copyright © 2005 Pearson Addison-Wesley. All rights reserved.9-2 Learning Objectives Determine why the demand curve for labor.
Returns to Human Capital Investments Graph copyright © 2003 by Pearson Education, Inc. This figure presents the mean earnings for full-time, full-year.
The Labor Market Chapter 8 Copyright © 2011 by The McGraw-Hill Companies, Inc. All Rights Reserved.McGraw-Hill/Irwin.
Chapter 10 Labor Market Discrimination Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Labor Economics, 4 th edition.
Chapter 12: Gender, Race, and Ethnicity. Gender wage differences Full-time female workers have weekly earnings that are approximately 75% of the weekly.
Introduction Discrimination occurs when the marketplace takes into account such factors as race and sex when making economic exchanges. However, it is.
Next page Chapter 16: The Personal Distribution of Earnings.
Chapter 9: Labor Trends, Wages and Immigration
INPUT MARKET.
Chapter 14 - Labor McGraw-Hill/Irwin Copyright © 2015 The McGraw-Hill Companies, Inc. All rights reserved.
1 CHAPTER 12 Factor Markets and the Distribution of Income PowerPoint® Slides by Can Erbil © 2004 Worth Publishers, all rights reserved.
Copyright © 2008 Pearson Addison-Wesley. All rights reserved. Chapter 14 Labor Markets.
Economics of Gender Chapter 8 Assist.Prof.Dr.Meltem INCE YENILMEZ.
Labor Force Concepts Unemployment rate (UR) = unemployed / labor force Graph by Harcourt, Inc.
McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 8 The Wage Structure.
Chapter Thirteen Labor Markets. Copyright © by Houghton Mifflin Company, Inc. All rights reserved Figure 13.1: Labor Demand Curve and Labor Supply.
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter 7 The Wage Structure.
 Income varies widely throughout Canada and the United States, many find it to be inequality, while others say that if you work hard, you deserve a spot.
Chapter 10. Lorenz Curve and Gini Coefficient Measure distribution of thing your interested in. E.g.   Share of largest firms in an oligopolistic industry,
5. Wages and the Distribution of Income. Labour Market Trends Shift from agricultural and manufacturing to service-sector employment.
Addison Wesley Longman, Inc. © 2000 Chapter 12 Gender, Race, and Ethnicity in the Labor Market.
CHAPTER 9 The Economy at Full Employment CHAPTER 9 The Economy at Full Employment Chapter 26 in Economics Michael Parkin ECONOMICS 5e.
Introduction to Economics: Social Issues and Economic Thinking Wendy A. Stock PowerPoint Prepared by Z. Pan CHAPTER 19 THE ECONOMICS OF LABOR MARKET DISCRIMINATION.
Inequality. Household income thresholds for selected percentiles (U.S. 2013) 10 th percentile? 20 th percentile? 50 th percentile? 80 th percentile? 90.
 Goal of Equity in Income distribution: is to have a more equitable (fairer) distribution of income. That means productive income is divided among the.
Isocosts Summarize Prices of Inputs
Chapter 12Copyright ©2009 by South-Western, a division of Cengage Learning. All rights reserved 1 ECON Designed by Amy McGuire, B-books, Ltd. McEachern.
1 Labor Markets and Income Distribution ©2006 South-Western College Publishing.
SS.912.E.1.9 Describe how the earnings of workers are determined Standard 1 Understand the fundamental concepts relevant to the development of a market.
Chapter 2 Overview of the Labor Market. Copyright © 2003 by Pearson Education, Inc.2-2 Outline The labor market definition, facts, and trends - Labor.
Income Inequality, Poverty, and Discrimination Chapter 20 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
ECONOMICS: Principles and Applications 3e HALL & LIEBERMAN © 2005 Thomson Business and Professional Publishing Economic Inequality.
Chapter 12 Gender, Race, and Ethnicity in the Labor Market.
Chapter 21 Income Inequality, Poverty, and Discrimination Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution.
1. Give an example not in your book that would illustrate the concept of “compensating differential.” Less desirable places to live Low wage advancement.
Chapter 21 Income Inequality, Poverty, and Discrimination Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution.
Chapter 2 Overview of the Labor Market. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2-2 FIGURE 2.1 Labor Force Status of the U.S. Adult.
Labor Markets Supply and Demand Wages  Wage = Price of labor including fringe benefits  Real wage = adjustment for inflation.
1 Net Worth over $2.3 billion Copyright ACDC Leadership 2015.
Copyright © 2009 Pearson Education, Inc. Chapter 12 Gender, Race, and Ethnicity in the Labor Market.
Price Ceilings and Floors. Price Ceilings 0 A price ceiling sets the highest price that can be charged for a good or service. The price is generally set.
Unit 5: The Resource Market 1. Review 1.Give an example of Derived Demand. 2.Define MRP. 3.Explain the difference between MRP and MR. 4.Why does the MRP.
Classical Theory of Interest Rate : The Loanable Fund Theory
Labor Market Discrimination
12 Gender, Race, and Ethnicity in the Labor Market.
Unit 5: The Resource Market
Fig. 1 Product Markets and Factor Markets
Theories of Income Distribution
Poverty.
Unit 5: The Resource Market
Unit 5: The Resource Market
Presentation transcript:

Employer Taste for Discrimination Nondiscriminatory firms will hire at the same wage, but discriminatory firms act as if MRP is lower than it is and will only hire at a lower wage. With supply S2, there will be a wage gap in equilibrium. Graph by Harcourt, Inc.

An Increase in Nondiscriminatory Firms More firms with no taste for discrimination is like a shift out in the demand for minorities and increases the relative wage. Graph copyright © 2003 by Pearson Education, Inc.

A Decline in the Taste for Discrimination A decline in firms’ taste for discrimination is like a rotation out in the demand for minorities and increases the relative wage. Graph copyright © 2003 by Pearson Education, Inc.

Occupational Crowding If a minority group is denied entry to a given sector, the sector they are allowed in can become crowded, leading to a wage gap between sectors, and hence between groups. Graph copyright © 2003 by Pearson Education, Inc.

Using a Signal for Screening In this example, it would make sense to use a score on the test as a screen for hiring, even though some mistakes would be made. The further apart the distributions the better the screen. If they were so noisy that they were very close, it could be worth investing in a new signal. Graph copyright © 2003 by Pearson Education, Inc.

Statistical Discrimination – Group as Screen If there is a difference on average between groups, group identity might be used as a screening device. The closer the group distributions, the more costly statistical discrimination will be. Graph by Harcourt, Inc.

Earnings Distributions Earnings distributions have a long right tail. Graph by Harcourt, Inc.

Constructing a Lorenz Curve Households are lined up by income quintiles. Here the lowest income quintile earns just .038 of total income. The top quintile earns 1-.532 = .468 of total income. Equality would imply a straight line. Graph copyright © 2003 by Pearson Education, Inc.

Inequality Increased 1980 t0 1992 Graph copyright © 2003 by Pearson Education, Inc.

Supply-Side Sources of Widening Inequality For supply-side sources to explain the observed trends, supply of higher skilled workers would have to decrease and of lower-skilled workers would have to increase. Graph copyright © 2003 by Pearson Education, Inc.