Lecture Labour market economics: Chapter 12 - Dwayne Benjamin, Morley Gunderson, Craig Riddell

The topics discussed in chapter 12 are discrimination and male-female earning differentials. The main contents of this chapter include all of the following: Wages differences between men and women, methods of measuring discrimination, discrimination against women, effective policies.

Chapter Twelve Discrimination and Male-Female Earning Differentials  Created by: Erica Morrill, M.Ed           Fanshawe College © 2002 McGraw-Hill Ryerson Ltd Chapter 12-1 Chapter Focus  Wages differences between men and women  Methods of measuring discrimination  Discrimination against women  Effective policies © 2002 McGraw­Hill Ryerson Ltd Chapter 12­2 Reasons and Sources of Discrimination Preference  Erroneous information  Statistical judgement  The effectiveness of policies depends on the reasons for the discrimination  Employers  Co-workers  Unions with male majority  Customers  © 2002 McGraw­Hill Ryerson Ltd Chapter 12­3 Demand Theories of Discrimination  Demand for female labour is lower  Reducing the employment of females  Demand depends on the information concerning productivity © 2002 McGraw­Hill Ryerson Ltd Chapter 12­4 Supply Theories of Discrimination  Supply is increased  Asking wage of females is reduced  Crowding Hypothesis  females jobs are segregated into female type  Abundance of supply lowers their marginal productivity and hence the wage © 2002 McGraw­Hill Ryerson Ltd Chapter 12­5 Supply Theories of Discrimination  Dual labour market theory  Primary labour market-(unionized, monopolistic, expanding)  Secondary labour market (nonunionized, highly competitive, declining)  Men tend to be employed in primary  Women in the secondary © 2002 McGraw­Hill Ryerson Ltd Chapter 12­6 Reasons Females are Crowded into the Secondary Market  Prejudice and exclusion  Immobility  Poor working conditions absenteeism and wages  Female attitudes on labour market worth  Female preferences - willing or imposed © 2002 McGraw­Hill Ryerson Ltd Chapter 12­7 Noncompetitive Theories of Discrimination  Wage differentials are inconsistent with market theory  Persistence due to  costs of adjustment  imperfect information  queuing theories © 2002 McGraw­Hill Ryerson Ltd Chapter 12­8 Noncompetitive Theories  Government  Trade unions  Employers  Monopsony  Systemic Discrimination © 2002 McGraw­Hill Ryerson Ltd Chapter 12­9 Productivity Differences: Choice or Discrimination  Dual  role unable to recoup costs of human capital formation  Intermittent  labour market time prevents them from acquiring continuous labour market experience  Discrimination  in the borrowing to finance human capital  External  pressures close off avenues of capital formation Chapter 12­ © 2002 McGraw­Hill Ryerson Ltd 10 Evidence on Male-Female Earning Differentials  Pure wage gap exists due to discrimination  Factors outside the labour market impact inequity  Occupational distribution  Industry distribution Chapter 12­ © 2002 McGraw­Hill Ryerson Ltd 11 Policies to Combat Sex Discrimination  Conventional Equal Pay  deals only with wage discrimination within the same job within the same establishment  Equal Value, Pay Equity or Comparable Worth  value procedures an important component  Equal Employment Opportunity-may benefit new recruits  Affirmative Action/Employment Equity  Facilitating Policies Chapter 12­ © 2002 McGraw­Hill Ryerson Ltd 12 Equal Value Procedures  Equality of pay between jobs of equal value  Value determined by job evaluation scheme free of gender bias  Comparisons between jobs that are predominantly male and predominantly female  Rationale-deals with both wage discrimination and occupational segregation Chapter 12­ © 2002 McGraw­Hill Ryerson Ltd 13 Rationale and Scope  Deals with both wage discrimination and occupational segregation  Scope  Complaint based system  Comparisons can only be made within the same establishment Chapter 12­ © 2002 McGraw­Hill Ryerson Ltd 14 Impact of Policy Initiatives  Canada  policies of “equal pay for equal work” have not had any impact  Britain has been more successful  When it is incorporated into collective bargaining  Equal pay and equal employment studies are inconclusive Chapter 12­ © 2002 McGraw­Hill Ryerson Ltd 15 Impact of Policies  Affirmative Action  U.S shows benefits to minority groups targeted at the expense of other minority groups  Comparable Worth/Pay Equity  Can close a portion of the overall gap within particular elements of the public sector Chapter 12­ © 2002 McGraw­Hill Ryerson Ltd 16 End of Chapter Twelve Chapter 12­ © 2002 McGraw­Hill Ryerson Ltd 17 ... © 2002 McGraw­Hill Ryerson Ltd Chapter 12 5 Supply Theories of Discrimination  Dual labour market theory  Primary labour market- (unionized, monopolistic, expanding)  Secondary labour market (nonunionized,... © 2002 McGraw­Hill Ryerson Ltd Chapter 12 6 Reasons Females are Crowded into the Secondary Market  Prejudice and exclusion  Immobility  Poor working conditions absenteeism and wages  Female attitudes on labour market. .. capital formation Chapter 12 © 2002 McGraw­Hill Ryerson Ltd 10 Evidence on Male-Female Earning Differentials  Pure wage gap exists due to discrimination  Factors outside the labour market impact