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Journal ArticleDOI

Identification, screening and stereotyping in labour market discrimination

TL;DR: In this article, a microeconomic model of hiring and pay decisions by an employer is presented, where the authors integrate both responses in a model of uncertainty in decision-making, leading to less stereotyping of people and hence less discrimination, and social identification with an ingroup, inducing more reliance on stereotypic perceptions and prejudices, and hence more discrimination against an outgroup.
Abstract: According to social-psychological research, feelings of uncertainty in decision-making evoke two opposite responses: (i) reduction of uncertainty by information search, leading to less stereotyping of people, and hence less discrimination; (ii) social identification with an ingroup, inducing more reliance on stereotypic perceptions and prejudices, and hence more discrimination against an outgroup. We integrate both responses in a microeconomic model of hiring and pay decisions by an employer. Increasing competition in the product market makes the employer feel more uncertain about his profits, but also raises the opportunity cost of screening expenditures. This elicits substitution of ingroup identification for screening expenditures, and hence enhances discrimination.

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Citations
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Journal ArticleDOI
TL;DR: This paper argued that competition might be good for ethical behavior in the long run, because it promotes growth and raises incomes, and higher incomes raise the willingness to pay for ethical behaviour, but may also change what people believe to be ethical for the better.
Abstract: Explanations of unethical behavior often neglect the role of competition, as opposed to greed, in assuring its spread. Using the examples of child labor, corruption, excessive' executive pay, corporate earnings manipulation, and commercial activities by universities, this paper clarifies the role of competition in promoting censured conduct. When unethical behavior cuts costs, competition drives down prices and entrepreneurs' incomes, and thereby reduces their willingness to pay for ethical conduct. Nonetheless, I suggest that competition might be good for ethical behavior in the long run, because it promotes growth and raises incomes. Higher incomes raise the willingness to pay for ethical behavior, but may also change what people believe to be ethical for the better.

343 citations

Journal ArticleDOI
TL;DR: In this article, the authors analyse the role of employers as "institutional" factors in the creation of segmentation in the labour market, focusing on the sectors of catering, cleaning and security as low-skilled service sector providers.
Abstract: Purpose – The purpose of this paper is to analyse the role of employers as “institutional” factors in the creation of segmentation in the labour market. Industrial structure defines segments of the labour market (the employer) based on the nature of demand, and with the impact on the individual workers or groups based on their personal characteristics.Design/methodology/approach – Empirical work is within the Dublin labour market, which experienced the largest increase in availability of migrant workers under immigration policies of the Celtic Tiger state. Focused on the sectors of catering, cleaning and security as low‐skilled service sector providers, the analysis is based on 24 semi‐structured interviews with employers selected based on a database of a cross‐section of all employers in the selected sectors in Dublin.Findings – Semi‐structured interviews reinforce state policies as key institutional factor underlying migrant labour trends and experiences, but perspectives of the employers in low‐end ser...

14 citations

Journal ArticleDOI
TL;DR: The authors developed a model of how those judgments form based on a theory of symbolic values, which depicts the interaction between two values, one associated with an inherited ethnic trait (nationality) and one with an endogenous achievement trait (income) and found that individuals with lower cognitive ability are predicted to invest more value on nationalism and to have hostile relations with immigrants.
Abstract: Interpersonal relations are shaped by the judgements associated with the social categories that individuals perceive in their social contacts. I develop a model of how those judgments form based on a theory of symbolic values. The model depicts the interaction between two values, one associated with an inherited ethnic trait (“nationality”) and one with an endogenous achievement trait (“income”). Individuals with lower cognitive ability are predicted to invest more value on nationalism and to have hostile relations with immigrants. Multiple equilibria are possible, and better schooling may eliminate equilibria with xenophobia. Econometric findings based on data from three large surveys corroborate the predictions derived from the theoretical model.

14 citations

Journal ArticleDOI
TL;DR: This article examined the effect of transitioning from welfare to full-time employment on a variety of measures of subjective well-being for a sample of long-term welfare recipients in British Columbia and New Brunswick who participated in the Self-Sufficiency Project (SSP).
Abstract: I examine the effect of transitioning from welfare to full‐time employment on a variety of measures of subjective well‐being for a sample of long‐term welfare recipients in British Columbia and New Brunswick who participated in the Self‐Sufficiency Project (SSP). Individuals randomly assigned to the treatment group could receive a generous time‐limited earnings supplement if they found full‐time work. I use random assignment to estimate the local average treatment effect of working full time on well‐being. For the complier subpopulation, I find large, positive effects on subjective well‐being that persist over the longer run for New Brunswick and through roughly three years for British Columbia. Policy changes made during the experiment may explain the provincial differences. De l’aide sociale au travail et bien‐etre subjectif : l’exemple d’un echantillon aleatoire et controle. Dans cet article, j’etudie les effets du passage de l’aide sociale au travail a temps plein sur un ensemble de mesures de bien‐etre subjectif au sein d’un panel d’allocataires sociaux de longue duree ayant participe au Projet d’autosuffisance (PAS) en Colombie‐Britannique et au Nouveau‐Brunswick. Les participants au projet, integres au groupe experimental de facon aleatoire, pouvaient beneficier de complements de revenus genereux et limites dans le temps a condition de trouver un emploi a temps plein. Afin d’evaluer l’effet de traitement moyen local du travail a plein temps sur le bien‐etre, j’ai utilise la technique d’affectation aleatoire. Pour le sous‐groupe ayant retrouve un travail a temps plein, les effets positifs sur le bien‐etre sont importants et persistent de maniere durable au Nouveau‐Brunswick tandis qu’ils ne durent qu’environ trois ans en Colombie‐Britannique. Les changements de politiques au cours de l’experience peuvent expliquer les differences entre les deux provinces.

3 citations

Journal ArticleDOI
TL;DR: In this article, the authors consider industries where the equally skilled workers/members of firm-specific monopoly unions can be grouped according to different reservation wages, and they show that, in absence of active antidiscrimination policy, discriminatory wage contracts across groups of employees may emerge, in equilibrium, under either oligopoly or a perfectly competitive product market.
Abstract: We consider industries where the equally skilled workers/members of firm-specific monopoly unions can be grouped according to different reservation wages. We show that, in absence of active antidiscrimination policy, discriminatory wage contracts across groups of employees may emerge, in equilibrium, under either oligopoly or a perfectly competitive product market. We subsequently propose that to combat wage discrimination a benevolent policy maker should under either market structure subsidize the employment of the low reservation wage group. The reason is that taxing wage discrimination, as an alternative antidiscrimination policy, always entails a welfare loss relative to the no policy/wage discrimination status quo.

3 citations

References
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Journal ArticleDOI
TL;DR: When labor supply curves are upward-sloping, wage discrimination against black men reduces not only their relative wages, but also their relative employment rates as mentioned in this paper, using data from the 1984 Survey of Black Men.
Abstract: When labor supply curves are upward-sloping, wage discrimination against black men reduces not only their relative wages, but also their relative employment rates. Using data from the 1984 Survey o...

30 citations

Book ChapterDOI
TL;DR: In this paper, the authors examined the impact of international trade competition on the gender wage gap in Taiwan and South Korea and found that Taiwan became increasingly open to trade, with a steady rise in the total trade to output ratio from a low of 48 percent in the early 1980s to a high of almost 90 percent by the late 1990s.
Abstract: During the last several decades, industry and export mixes in Taiwan and South Korea have shifted toward higher-skill, technology-intensive products, while lower-skill, labor-intensive industries have been moving abroad. At the same time, women’s relative educational attainment and skill levels improved considerably. Yet some trends have differed across these two economies. Taiwan became increasingly open to trade, with a steady rise in the total trade to output ratio from a low of 48 percent in the early 1980s to a high of almost 90 percent by the late 1990s. Against this backdrop, Taiwan’s average female—male wage ratio in manufacturing dropped fairly steadily from 66 percent in 1981 to 60 percent in 1993. Only in the mid-1990s did the wage ratio begin a strong climb upward, reaching 67 percent by 1999. In contrast, Korea’s slow and steady improvement in women’s relative wages — from 47 percent in 1980 to 58 percent by 1998 — was accompanied by a slight decline in trade openness.1 Industrial structure and policy also differ between the two economies, with Taiwan having a higher proportion of small firms and relatively less emphasis on selective government intervention. These divergent features in two of the most successful practitioners of the export-led growth model make Taiwan and Korea well-suited to examine the impact of international trade competition on the gender wage gap.

28 citations

Journal ArticleDOI
TL;DR: The US has responded by taking actions that focus on women's economic enterprises, such as directing management training to women farmers in Albania and Russia and advocating the creation of microcredit schemes for women.
Abstract: In the newly independent states of Eastern Europe the low status of women is hindering economic development and the transition to democracy. The transition from communism to capitalism has caused women to suffer from diminished labor market access increased vulnerability to crime (including trafficking in women) loss of family-oriented social benefits and exceedingly low representation in parliaments. These factors have combined to produce the striking feminization of poverty evident in many countries. Many countries also have not yet established laws and mechanisms to protect women from sexual harassment in employment rape or domestic violence. All of this ignores the fact that women create the essential social elements of political stability and fuel economies because they are reliable employees and innovative entrepreneurs. In response women have formed new alliances (including some that reached across enemy lines in Bosnia) and scores of nongovernmental organizations. The US has responded by taking actions that focus on womens economic enterprises such as directing management training to women farmers in Albania and Russia and advocating the creation of microcredit schemes for women. The US is also supporting efforts to harmonize national and international policies and legislation to stop trafficking in women and is taking steps to support and develop women leaders in the region. It is in the best interest of the US to magnify the voices of women who are echoing US values in postcommunist Europe.

22 citations

Journal ArticleDOI
TL;DR: In this article, the authors showed that context of comparison revealed an effect on both level of group identification and perceptions of relative ingroup and outgroup homogeneity, and more importantly, it was argued that this effect could be explained by an increase in the salience of participants' group identity.
Abstract: Recent research has shown that creating an intergroup context of comparison may influence the outgroup homogeneity effect or even turn it into an ingroup homogeneity effect. In the present study, the aim was to replicate these findings by using overall judgment of similarity instead of the more commonly used dimensional ratings. Further, and more importantly, it was argued that this effect could be explained by an increase in the salience of participants’ group identity. The results showed that context of comparison revealed an effect on both level of group identification and perceptions of relative ingroup and outgroup homogeneity. In line with predictions, participants’ level of group identification seemed to account for the effect of the comparison context on the homogeneity ratings.

17 citations

Journal ArticleDOI
Rein Haagsma1
TL;DR: In this article, the use of sex or race as a free screening device reduces allocative inefficiencies in the economy, however, if a firm's hiring policy is hampered by problems of adverse selection, statistical discrimination may not be socially efficient.

13 citations