Immigrants and Ethnic Differences - Immigrants and Ethnic Differences

Immigrants and ethnic differences

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Unformatted text preview: Fortin – Econ 560 IV. Differences across Groups 2. Gender and Race in the Labour Market 1. Changes in male-female labour outcomes over time 2. Gender differences in pre-market characteristics and human capital 3. Racial differences in pre-market characteristics and human capital 3. Immigrants and Ethnic Differences Lecture 4B Fortin – Econ 560 Lecture 4B 2.1. Changes in Male-Female Labour Outcomes over Time Differences between men and women in the labour market outcomes, namely labour force participation, labour supply, unemployment rates and their relative wages, called the gender pay gap, always capture the attention of the public at large. It is a continuing topic of interest for labour economists, and more recently, has become more salient in the work of macroeconomists, who also integrate issues of fertility o For example, the relationship between fertility and female labor force participation (FLP) Goldin (1990) provides an authoritative account of the historical trends in women’s labour market outcomes going back to the 18th century. The industrial revolution and the mass migration to cities provided the first impetus behind the changing roles of men and women, when men move from agricultural employment into manufacturing and women move out of “light manufacturing” and concentrated on homemakers and child rearing. Fortin – Econ 560 Lecture 4B Keeping in mind the functions from static labour supply models: H i 0 1 ln wi 2 I i X iβ ui or H i 0 1 ln wi 2 ln wiS 3 Ai X iβ v i where H is hours worked, w is one’s own hourly wage offer, I is family asset income plus spouse’s earnings, X is a vector of control variables, or w S is one’s spouse’s hourly wage offer (assuming one is married), A is family asset income. There are numerous pitfalls in the estimation of such equations including the fact that we do not observe wage offers for those without jobs and that the distribution of hours is censored, measurement errors in hours, omitted variables, etc. Assuming satisfactory solutions to these problems 1 and 1 will capture the own-wage (uncompensated) effect of labour suppy 2 and 3 will capture the income effect and the substitution effect (compensated wage effect) will be computed from the difference between the two Fortin – Econ 560 Lecture 4B with the second equation, there is a cross-spouse effect Goldin (1996) identify four phases in the transformation of women’s work o Phase I occurred from the late nineteenth century to the 1920s: few adult and married women were in the labor force. the income elasticity of female labour supply was large (and negative) and the substitution elasticity of labour supply was small. o Phase II was from 1930 to 1950: the stigma surrounding married women’s work outside the home is reduced (impact of World War II) and electric household appliances begin to diffuse the income elasticity decreased considerably in (absolute) magnitude and the substitution effect increased substantially with the reduction in hours (and days) of work, the initial stirrings of part-time work, o Phase III extended from 1950 to the late 1970s: the large increase in aggregate demand, especially in the 1960s, and the accommodation of married women with the expansion of part-time work female labor supply was rather elastic. For...
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