Detecting_6 - Detecting Discrimination Labor market...

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1 Detecting Discrimination Ch12 pp. 395-397 Detecting Discrimination Labor market discrimination is said to exist if individual workers who have identical productive characteristics are treated differently because of the demographic groups to which they belong. Does labor market discrimination exist, and if so, how much of the wage gap is due to labor market discrimination? Detection Strategies We will consider three strategies for detecting discrimination: 1) Audit Studies An audit study is a field experiment where the researcher manipulates an aspect of the labor market. Empirical Methods These studies use naturally occurring data. 2) Common Coefficient Model A standard regression model that assumes that the productive characteristics of men and women are rewarded equaly in the labor market. 3) Oaxaca Decomposition Allows for productive characteristics to be rewarded differently for women than for men. Audit Studies vs. Empirical Methods • Audit Study – Advantages • Can create workers that have identical productive characteristics. – Disadvantages • Limited in scope - not representative of the labor market as a whole. • Small sample size.
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Detecting_6 - Detecting Discrimination Labor market...

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