Welcome to Econ 325 Economics of Gender

1. Welcome to Econ 325 Economics of Gender Week 12 Beginning April 16

2. 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.

3. 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?

4. 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?

5. Monopoly • One firm in the product market • Price seeker (maker) • Can increase price of output easily • If hiring women is perceived to be costly, can afford to hire women and raise the price discriminates less • If due to pre-existing discrimination, women are cheaper to hire, may not hire women  discriminate more

6. Perfectly competitive Firm • One of many small firms in the product market • Price taker • Can’t increase price of output • If hiring women is perceived to be costly, can’s afford to hire women and raise the price discriminates more • If due to pre-existing discrimination, women are cheaper to hire, may hire women  discriminates less

7. The Overcrowding Model • Assumptions • Two jobs: Carpentry & Receptionist • Initially there is no discrimination • All workers (male & female) are equally productive and qualified for both jobs • Other demand and supply conditions are the same in both markets

8. 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?

9. 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?

10. Internal Labor Markets • Higher positions in a company are mostly open to existing employees only. Why? • Specific training • Loyalty • Less uncertainties • This makes the labor market less competitive • Women may have a hard time penetrating these markets

11. 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

12. Wednesday, April 18 • Complete Paper is due April 27 • Title: An economic analysis of …. • Introduction • Description of your topic and why it is important • Format of the paper • Observation • statistical or empirical of existence or nonexistence of economic differences by gender • Graphs/written reports by others/tables

13. 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 opinion 7. Conclusions/summary 8. Sources sited

14. 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

15. 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)

16. 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

17. Study • The rest of Chapter 7 on your own (excluding the appendix) • The WSJ article • Expect a bonus ICA on Friday

18. Friday, April 20 • Paper is due next Friday • You are responsible for the entire Chapter 7 • Study Chapter 8

19. ICA: Answer 2 of the following 3 questions • What is the “bona fide occupational qualification (BFOQ)” exception? Give an example. • Give an example of unintentional discrimination that has a disparate impact. • Relate the story in the WSJ to the statistical discrimination or the feed back effect.

20. 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?    

21. 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

22. 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