Fortin – Econ 560 Lecture 4AB IV.Group Differences in Labour Market OutcomesPlan A. Theories of Discrimination1.What is Economic Discrimination?2. Theories of Discriminationa. Taste-Based Discriminationb.Statistical Discrimination c. Other Models : i.Efficiency wage modelsii.Monopsony in the labour marketiii.Rent-seeking modelsiv.Supply-Side theories, crowdingB. Measurement 1.Direct Evidence2. Indirect Evidencea. Estimating simple models of wage determinationb. Methodologies for decomposing wage changes between groups c. Variants of Oaxaca-Blinder
Fortin – Econ 560 Lecture 4AB 1.What is Economic Discrimination?
Fortin – Econ 560 Lecture 4AB Drawing from psychology, recent experimental studies have also examined the effects of observed characteristics, such as status or group identity, on the way people are treated differently (e.g. Fershtman and Gneezy, 2001). In Canada, studies have traditionally focused on gender and language(French-English) wage differentials, and more recently on wage differentials across more ethnic groups including aboriginals(Pendakur, Pendakur and Woodcock, 2006) and persons with disabilities. Racial or ethnic profiling has introduced another dimension in which instances of discrimination can be invoked. In Europe, the poor labour market outcomes of 2ndgeneration immigrants have provoked severe incidents of civil unrest. Discrimination on the basis of religiousbeliefs(e.g. Muslims in the UK) has come to the fore. Sexual orientation is also another type of group membership that is included in most human rights codes which protect against discrimination through litigation. •Discrimination raises problems of inequityand of inefficiency. •Many countries also have responded to these perceived inequities by enacting equality promoting legislation.
Fortin – Econ 560 Lecture 4AB In the United States, legislations have taken the form of “affirmation action” legislations which focus on “equality of opportunities” rather than “equality of outcomes”.