Welcome to Econ 325 Economics of Gender

Week 12Beginning April 16

Monday, April 16

• I received Part 3 of Paper from• Bryan Adams• Josh• Heidi

• The complete Paper is due April 27• Please make an appointment to see

me.

Return and discuss OCA6 (5 points)

• # 3, page 254. This assignment will be graded competitively.• Definition of discrimination• You observe the wage gap• Need to look for

• Type of jobs− Human capital issues

– More education higher wage– More experience higher wage– Part time/full time– Interruption– General/specific trainings

• Type of jobs− Supply and demand issues

• Possible discrimination− Is there any evidence that employer is discriminating?− Is there any evidence that male employers are discriminating?− Is there any evidence that consumers are discriminating?

Return ICA (un-graded)

• Distinguish between a monopoly and a competitive industry. In which industry would you expect to find that employers discriminate more against women in their hiring practices? Why?

Monopoly

• One firm in the product market• Price seeker (maker)

• Can increase price of output easily1. If hiring women is perceived to be costly,

can afford to hire women and raise the price discriminates less

2. If due to pre-existing discrimination, women are cheaper to hire, may not hire women discriminate more

Perfectly competitive Firm

• One of many small firms in the product market

• Price taker • Can’t increase price of output1.If hiring women is perceived to be costly,

can’s afford to hire women and raise the price discriminates more

2.If due to pre-existing discrimination, women are cheaper to hire, may hire women discriminates less

The Overcrowding Model

• Assumptions1. Two jobs: Carpentry & Receptionist2. Initially there is no discrimination3. All workers (male & female) are

equally productive and qualified for both jobs

4. Other demand and supply conditions are the same in both markets

The Overcrowding Model

• Market graphs• The equilibrium wage rate is the

same in both markets• The equilibrium number of workers is

the same in both markets• There are 20 female and 30 male

carpenters• There are 20 female and 30 male

receptionists• What is the segregation index?

The Overcrowding Model

• Suppose (due to discrimination or feedback effect) some female carpenters decided to become receptionists

• How does this affect the graphs?• The market for receptionists

becomes overcrowded• Effect on wage rate?• Effect on productivity?

Internal Labor Markets

• Higher positions in a company are mostly open to existing employees only. Why?

1. Specific training2. Loyalty3. Less uncertainties

• This makes the labor market less competitive

• Women may have a hard time penetrating these markets

Primary/Secondary Jobs

• Firms have 2 types of jobs• Type 1 (offered to men)

• Specific training, promotion, low turn over rate

• Type 2 (offered to women)• General training, less promotion, high

turn over rate

Wednesday, April 18

• Complete Paper is due April 271.Title: An economic analysis of ….2.Introduction

• Description of your topic and why it is important• Format of the paper

3.Observation• statistical or empirical of existence or

nonexistence of economic differences by gender • Graphs/written reports by others/tables

4. Theory• How does economic theory explain what we observe?• This section comes from you, your book, your notes,

everything you learned in this class.• Pretend you are describing the theory to someone

who has not heard of them before and does not have much background in economics

5. Evidence for or against theory• More statistics and observations• Graphs/charts/tables

6. Policy recommendation/personal opinion7. Conclusions/summary8. Sources sited

Incentive

• Final draft will have 10 bonus points in it• You can make a maximum of 40 (of 30

possible points) on it

• I am available to help you• Use me

• Your grade is based on the quality of the paper not the quantity of pages

Social Costs of Discrimination

• Example• Clients prefer male attorneys

(discrimination)• female attorneys are less/more demanded

by law firms • female attorneys have an easier/ harder

time finding employment and/or they make less/more income than male attorneys (feedback)

Social Costs of Discrimination

• Fewer/more women go to law school (human capital model)

• Society loses the opportunity to benefit from the services of potentially very productive female attorneys

Study

1. The rest of Chapter 7 on your own (excluding the appendix)

2. The WSJ article3. Expect a bonus ICA on Friday

Friday, April 20

•Paper is due next Friday

•You are responsible for the entire Chapter 7

•Study Chapter 8

ICA: Answer 2 of the following 3 questions

1. What is the “bona fide occupational qualification (BFOQ)” exception? Give an example.

2. Give an example of unintentional discrimination that has a disparate impact.

3. Relate the story in the WSJ to the statistical discrimination or the feed back effect.

Fact: Wage inequality among both genders has increases (Chapter 8)

• Real wage of skilled workers has increases

• Real wage of unskilled workers has declined

• Why?      

Demand for unskilled workers has declined while demand for skilled workers has increased. Why?

• Technology• Global competition

• US has comparative advantage in production of goods and services that require skilled workers

• Decline in unionism

Fact: The male-female wage gap has diminished

• Figure 8.1 (page 258)• Why?• Gender differences in human

capital investments have narrowed• Gender discrimination has declined