Discrimination in Labor Markets

Discrimination in Labor Markets

Orley Ashenfelter
Albert Rees
Copyright Date: 1973
Pages: 196
https://www.jstor.org/stable/j.ctt13x10hs
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  • Book Info
    Discrimination in Labor Markets
    Book Description:

    This volume contains revised versions of the papers presented in 1971 at the Princeton University Conference on Discrimination in Labor Markets, and the formal discussions of them.

    This paper is by Kenneth Arrow, winner of the Nobel Prize in Economics, who lays the theoretical foundations of the economic analysis of discrimination in labor markets. Finis Welch discusses the relationship between schooling and labor market discrimination. Orley Ashenfelter's paper presents a method for estimating the effect of an important institution-trade unionism-on the wages of black workers relative to whites. Ronald Oaxaca provides a framework for measuring the extent of discrimination against women. Finally, Phyllis Wallace examines public policy on discrimination and suggests strategies for public policy in this area.

    Originally published in 1974.

    ThePrinceton Legacy Libraryuses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These paperback editions preserve the original texts of these important books while presenting them in durable paperback editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.

    eISBN: 978-1-4008-6706-6
    Subjects: Business, Sociology

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. CONTRIBUTORS
    (pp. vii-viii)
  4. INTRODUCTION
    (pp. ix-2)
    Orley Ashenfelter and Albert Rees

    This book contains the papers presented at a Princeton University Conference on Discrimination in Labor Markets held on October 7 and 8, 1971, and sponsored by the Industrial Relations Section and the Woodrow Wilson School of Public and International Affairs.

    Discrimination in wages by race and sex is a topic that has long interested economists, but thorough theoretical and quantitative analysis of it is rather recent. The beginning of this thorough analysis can best be dated by the publication of Gary S. Becker’sEconomics of Discrimination(University of Chicago Press, 1957). When one considers the quality of the analysis and...

  5. THE THEORY OF DISCRIMINATION
    (pp. 3-33)
    Kenneth J. Arrow

    The fact that different groups of workers, be they skilled or unskilled, black or white, male or female, receive different wages, invites the explanation that the different groups must differ according to some characteristic valued on the market. In standard economic theory, we think first of differences in productivity. The notion of discrimination involves the additional concept that personal characteristics of the worker unrelated to productivity are also valued on the market. Such personal characteristics as race, ethnic background, and sex have been frequently adduced in this context.

    Discrimination in this paper is considered only as it appears on the...

  6. COMMENT
    (pp. 34-42)
    Melvin W. Reder

    This paper is at least as good as the average Arrow performance, and perhaps even a little better. This is praise enough for any paper. Since the argument is developed with the author’s customary skill, a discussant has scant cause to complain about details and must proceed directly to fundamentals. Before doing so, I should like to apologize at least to some members of this conference for focusing upon issues of economic theory rather than attending to more practical aspects of discrimination. However, if economists are to be of any use in everyday matters, the theory with which they operate...

  7. EDUCATION AND RACIAL DISCRIMINATION
    (pp. 43-81)
    Finis Welch

    This is a tale of two kinds of progress. In the twentieth century there has been a pervasive improvement in the quality of schools attended by American Negroes relative to those attended by whites; and there has been an associated improvement for blacks in the income yield from schooling. My purpose is to argue that this association is causal, that improved quality has resulted in improved returns, and that discrimination against Negro education has occurred in the schools more than in the market.

    It is well known that, on balance, the ability of schooling to boost Negro earnings has been...

  8. COMMENT
    (pp. 82-87)
    Richard Freeman

    Labor market developments in the 1960’s (and to a lesser extent earlier) are changing the traditional picture of market discrimination against black Americans. Evidence is building of substantial improvements in the relative position of black workers and particularly, of the educated black who has long suffered the greatest relative disadvantage. Finis Welch offers us calculations supporting this “new” picture of discrimination and some interesting suggestions regarding the striking drop in black-white economic differences. Using individual observations from the 1960 census and the 1966 Survey of Economic Opportunity, Welch finds a substantial gain in the return to schooling by experience class...

  9. DISCRIMINATION AND TRADE UNIONS
    (pp. 88-112)
    Orley Ashenfelter

    Racial, sexist, and other prejudices filter through the institutions of the labor market before they are turned into the differences in wages or earnings that cannot be accounted for by differences in productive ability and that we label as discrimination. Economists typically avoid analyzing the nature and determinants of prejudice itself, and prefer to concentrate on analyses of the effects that various institutions have in exacerbating or mitigating the amount of discrimination that results from a given set and level of prejudices. It is unlikely that this preference stems wholly, or even largely, from any evidence that public policies designed...

  10. COMMENT
    (pp. 113-123)
    Herbert Hill

    Professor Ashenfelter’s paper is largely devoted to showing that craft unions lower the wages of blacks relative to whites as compared to the ratio in nonunion markets, and that industrial unions raise the wages of blacks relative to whites as compared to the ratio in nonunion markets. However, the paper does not show that industrial unions also discriminate against black workers. Because readers might get the erroneous impression from the paper that industrial unions do not discriminate, I shall use my comment to review some of the relevant evidence that they do.

    A significant feature of the development of case...

  11. SEX DISCRIMINATION IN WAGES
    (pp. 124-151)
    Ronald Oaxaca

    Culture, tradition, and overt discrimination tend to make restrictive the terms by which women may participate in the labor force. These influences combine to generate an unfavorable occupational distribution among female workers vis-à-vis male workers and to create pay differences between males and females within the same occupation. The result is a chronic earnings gap between male and female full-time, year-round workers. Unfortunately, explanations at this level of generality are mainly descriptive. It is the purpose of this paper to estimate the average extent of discrimination against female workers and to provide a quantitative assessment of the causes of male-female...

  12. COMMENT
    (pp. 152-154)
    Barbara R. Bergmann

    In thinking about the gap between white and black incomes many Americans soothe their consciences by choosing to believe that the race gap is due almost entirely to differences in personal characteristics of blacks and whites. Now that the women’s movement has focused attention on the gap in pay of men and women, the same kinds of statements are being made about the reasons for the sex gap. In the case of blacks, the finger is pointed at educational deficiency, both in quantity and in quality. That particular excuse (and the word excuse is used advisedly)¹ won’t work for women,...

  13. EMPLOYMENT DISCRIMINATION: SOME POLICY CONSIDERATIONS
    (pp. 155-175)
    Phyllis A. Wallace

    After the passage of the Civil Rights Act of 1964 an elaborate Equal Employment Opportunity delivery system was developed by the federal government. Figure 1 outlines in highly schematic form some of the numerous interactions of individuals and organizations which have shaped policy for equal employment opportunity for women and minority workers. Social scientists, especially economists, have only recently turned their attention to the difficult analytical problems of defining employment discrimination and suggesting appropriate remedies.¹ Although the studies by Becker, Thurow, and Arrow are important additions to economic literature, they have not produced analytical models that could be used for...

  14. COMMENT
    (pp. 176-181)
    Dale L. Hiestand

    Dr. Wallace has provided an excellent elucidation of the present system of federal policies and programs to deal with employment discrimination. I will confine my remarks to three points: the economic preconditions for an effective anti-discrimination program, the conflict between individualistic and class-based concepts of discrimination, and priorities in program efforts.

    The first point to be made is that efforts to promote equal employment opportunity stand little chance of being effective as long as unemployment levels for the total labor force continue to be high. My own studies and recent experience demonstrate that the occupational and income positions of minorities...

  15. Back Matter
    (pp. 182-182)