Prejudice and Gender Differentials in the U.S. Labor Market in the Last Twenty Years

Earnings differentials between men and women have experienced a stable convergence during the 1980s, following a process started in the late 1970s. However, in the 1990s the convergence has almost stopped. The first objective of the paper is to evaluate if discrimination, defined as explicit prejudice, may have a role in explaining this slowdown in the converge. The second objective is to assess whether the prediction of a de- crease in the proportion of prejudiced employers implied by the Becker's model of taste discrimination is taking place and if so at what speed. These objectives are achieved by developing and estimating a search model of the labor market with matching, bargaining, employer's prejudice and worker's participation decisions. The results show that the proportion of prejudiced employers is estimated to be decreasing at an increasing speed, going from about 69% in 1985 to about 32% in 2005. Therefore prejudice does not seem a relevant factor in explaining the slower convergence be- tween male and female earnings in the 1990s. The results are consistent with the Becker's model of taste discrimination if one is willing to assume a very slow adjustment process.Gender Differentials; Discrimination; Search Models; Maximum Likelihood Estimation; Structural Estimation.

The Effect of Job Flexibility on Female Labor Market Outcomes: Estimates from a Search and Bargaining Model

This paper develops and estimates a search model of the labor market where jobs are characterized by wages and work-hours flexibility. Flexibility is valued by workers, and is costly to provide for employers. The model generates observed wage distributions directly related to the preference for flexibility parameters: the higher the preference for flexibility, the wider is the support of the wage distribution at flexible jobs and the larger is the discontinuity between the wage distribution at flexible and non-flexible jobs. Estimation results show that more than one third of women place positive value to flexibility, with women with a college degree valuing flexibility more than women with a high school degree. Counterfactual experiments show that flexibility has a substantial impact on the wage distribution but not on the unemployment rate. We comment on the implications of our approach for gender differentials in wages and schooling.search model, work-hours flexibility, structural estimation

Gender discrimination estimation in a search model with matching and bargaining

Gender wage differentials, conditional on observed productivity characteristics, have been considered a possible indication of prejudice against women in the labor market. However, there is no conclusive evidence on whether these differentials are due to labor market discrimination or to unobserved productivity differences. The objective of this paper is to propose a solution for this identification problem by developing and estimating a search model of the labor market with matching, bargaining and employers' taste discrimination. In equilibrium all types of employers wage discriminate women: prejudiced employers because of preference and unprejudiced employers because of spillover effects that worsen the bargaining position of women. Estimation is performed by maximum likelihood on Current Population Survey data for the year 1995. Results indicate that the productivity of women is 6.5% lower than the productivity of men and that about half of the employers are prejudiced against women. Three policy experiments are implemented using the estimated parameters: an equal pay policy, an affirmative action policy and a wage differential decomposition that takes into account equilibrium effects

Intergenerational Mobility and Schooling Decisions in Germany and Italy: the Impact of Secondary School Tracks.

Intergenerational mobility in income and education is affected by the influence of parents on children's school choices. Our focus is on the role played by different school systems in reducing or magnifying the impact of parents on children's school choices and therefore on intergenerational mobility in general. We compare two apparently similar educational systems, Italy and Germany, to see how the common feature of separate tracks at Secondary School level may produce different impacts on children choices. Using data from a cross-country survey (PISA 2003), we study the impact of parental education on track choice, showing that the greater flexibility of the Italian system (where parents are free to choose the type of track) translates into greater dependence from parental background. These effects are reinforced when moving to post-secondary education, where the aspiration to go to college is affected not only by the school type but also (in the case of Italy only) by parental education. We then move to country-specific data sets (ISTAT 2001 for Italy and GSOEP 2001 and 2002 for Germany) to study the impact of family background on post-secondary school choices: we find this impact is greatly reduced when we control for secondary school tracks. Overall, we estimate large asymmetries by gender, with women's behavior more independent from family backgrounds than men's behavior.gender Secondary School tracks; Education; Intergenerational Mobility

Investire in istruzione: meglio per lui o per lei? Stima per genere dei rendimenti dell’istruzione in Italia

Previous estimates of Italian returns to schooling suggest that female returns are higher than male returns (Lucifora-Sestito ‘93). This is a common result in other industrialized countries, as well (Blau-Kahn ‘92 e Psacharopoulos ‘94). The aim of the paper is to evaluate the stability of this hierarchy by changing specifications and estimation techniques. All the estimates are performed on the Bank of Italy Indagine sui bilanci della famiglie nell’anno 1991. Results with standard techniques (i.e. ordinary least square and Heckman’s correction) confirm usual hierarchy, on the contrary alternative techniques (i.e. instrumental variables) suggest an opposite hierarchy. This is a robust conclusion by varying samples, instruments, and schooling measurements.human capital, returns to education, earnings

The Transmission Mechanism of Monetary Policy in Europe: Evidence from Banks' Balance Sheets

Available studies on asymmetries in the monetary transmission mechanism within Europe are invariably based on macro-economic evidence: such evidence is abundant but often contradictory. This paper takes a different route by using micro-economic data. We use the information contained in the balance sheets of individual banks (available from the BankScope database) to implement a case-study on the response of banks in France, Germany, Italy and Spain to a monetary tightening. The episode we study occurred during 1992, when monetary conditions were tightened throughout Europe. Evidence on such tightening is provided by the uniform squeeze in liquidity, which affected all banks in our sample. We study the first link in the transmission chain by analysing the response of bank loans to the monetary tightening. Our experiment provides evidence on the importance of the Europe and thus on one possibly important source of asymmetries in the monetary transmission mechanism. We do not find evidence of a significant response of bank loans to the monetary tightening, which occurred during 1992, in any of the four European countries we have considered. However we find significant differences both across countries and across banks of different dimensions in the factors that allow them to shield the supply of loans from the squeeze in liquidity.

Returns to education in the economic transition : a systematic assessment using comparable data

This paper examines the assertion that returns to schooling increase as an economy transitions to a market environment. This claim has been difficult to assess as existing empirical evidence covers only a few countries over short time periods. A number of studies find that returns to education increased from the"pre-transition"period to the"early transition"period. It is not clear what has happened to the skills premium through the late 1990s, or the period thereafter. The authors use data that are comparable across countries and over time to estimate returns to schooling in eight transition economies (Bulgaria, Czech Republic, Hungary, Latvia, Poland, Russia, Slovak Republic, and Slovenia) from the early transition period up to 2002. In the case of Hungary, they capture the transition process more fully, beginning in the late 1980s. Compared to the existing literature, they implement a more systematic analysis and perform more comprehensive robustness checks on the estimated returns, although at best they offer only an incomplete solution to the problem of endogeneity. The authors find that the evidence of a rising trend in returns to schooling over the transition period is generally weak, except in Hungary and Russia where there have been sustained and substantial increases in returns to schooling. On average, the estimated returns in the sample are comparable to advanced economy averages. There are, however, significant differences in returns across countries and these differentials have remained roughly constant over the past 15 years. They speculate on the likely institutional and structural factors underpinning these results, including incomplete transition and significant heterogeneity and offsetting developments in returns to schooling within countries.Education For All,Primary Education,Teaching and Learning,Education Reform and Management,Access&Equity in Basic Education

Household search or individual search: Does it matter? Evidence from lifetime inequality estimates

Search Models of the labor market are widespread and influential but they usually ignore that labor market decisions are frequently taken at the household level. We fill this gap by developing and estimating an household search model with on-the-job search and labor supply. We build on previous work (Dey and Flinn (2008) and Guler, Guvenen and Violante (2011)) to propose a novel identification strategy of the risk aversion parameters and a specification test. We find that ignoring the household as unit of decision-making has relevant empirical consequences. In estimation, the individual search specification implies gender wage offers differentials 200% larger than the household search specification. In the application, the individual search specification implies gender differentials in lifetime utility inequality 74% larger. The results of our policy experiments emphasize the importance of looking at lifetime utility inequality measures as opposed to simply cross-sectional wage inequality measures

Intergenerational mobility and schooling decisions in Germany and Italy: the impact of secondary school tracks

Intergenerational mobility in income and education is affected by the influence of parents on children's school choices. Our focus is on the role played by different school systems in reducing or magnifying the impact of parents on children's school choices and therefore on intergenerational mobility in general. We compare two apparently similar educational systems, Italy and Germany, to see how the common feature of separate tracks at Secondary School level may produce different impacts on children choices. Using data from a cross-country survey (PISA 2003), we study the impact of parental education on track choice, showing that the greater flexibility of the Italian system (where parents are free to choose the type of track) translates into greater dependence from parental background. These effects are reinforced when moving to post-secondary education, where the aspiration to go to college is affected not only by the school type but also (in the case of Italy only) by parental education. We then move to country-specific data sets (ISTAT 2001 for Italy and GSOEP 2001 and 2002 for Germany) to study the impact of family background on post-secondary school choices: we find this impact is greatly reduced when we control for secondary school tracks. Overall, we estimate large asymmetries by gender, with women's behavior more independent from family backgrounds than men's behavior