Exam 3-Women in the Workforce

Labor Market Discrimination

The situation where two equally qualified individuals are treated differently in the labor market on the basis of their gender.

Marginal Product

The increase in output that arises from an additional unit of input. In some analyses they assume that male and female workers are equally well qualified and, in the absence of discrimination, would be equally productive and receive the same pay.

Tastes for discrimination

Becker conceptualized that employers, coworkers, and customers may all potentially display a taste against associating with a particular group.

Nonpecuniary Cost

Nonmonetary cost, such as the feeling of distaste experienced when an individual has to associate with a group who holds what is viewed as a socially inappropriate role.

Discrimination Coefficient

The strength of an individual's discriminatory taste is measured by this, the size of these costs in money terms.

Employer Discrimination

An employer who has a taste for discrimination against women will act as if there a nonpecuniary cost of employing women equal in dollar terms to dr (discrimination coefficient). To this employer, the cost of employing a man will be his wage wm, but the full costs of employing a woman will be her wage plus the discrimination coefficient (wf+dr). Discriminating employers will hire a woman only at a lower wage than a man (wf=wm-dr). Women will be hired only if they are paid less than their productivity assuming MPs are the same.

Monopsony Power

Firm has some power to set the wages of its workers. Can gain when it is a large buyer of labor relative to the size of a market. Can hold greater monopsony power over women than men.

Implicit Discrimination

Unconscious biases can cause people to "think, feel, and behave in ways that oppose their explicitly expressed views, and even, explicitly known self-interests."

Employee Discrimination

Male employee who has a taste for discrimination against women will act as if there is a nonpecuniary cost of working with women equal to his discrimination coefficient, de. This is the premium he must be paid to induce him to work with women. If a discriminating male worker would receive wm if he did not work with a woman, he would only be willing to work with a woman at a higher wage (wm+de).

Compensating Wage Differential

Compensation wage offered to workers for working in unpleasant or unsafe working conditions. On male employees, sometimes higher wage expected by male employee to work with a woman.

Identity Model

George A. Akerlof and Rachel E. Kranton's model, occupations are associated with societal notions of "male" and "female." Men oppose the entry of women into traditionally male jobs out of concern that they will lose their male identity or sense of self.

Pollution theory of discrimination

Goldin. Entry of women into traditionaly male jobs is seen by male incumbents as reducing the prestige of the occupation, based on general social perceptions that women are on average less productive.

Customer Discrimination

Customers or clients who have tastes for discrimination against women will act as if there is a nonpecuniary cost associated with purchasing a good or a service from a woman equal to their discrimination coefficient, dc. Will behave as if the full price of the good or service is p+dc if sold or provided by a woman but only p if sold or provided by a man.

Subtle Barriers

Women i the workplace may have fewer role models, participate less in mentor-protégé relationships, be excluded from informal networks, perception of women not fitting in with the group as well as a man would.

Statistical Discrimination

Phelps thought “tastes” weren’t the answer. Key to this is Beliefs. Occurs when employers believe that on average women are less productive or less stable employees and treat individual women as if they conform to the average.

Overcrowding Model

Barbara Bergmann, regardless of the reason for segregation the consequence may be a male-female pay differential which will occur if the demand in the female sector is small relative to the supply of women available for such work.

Institutional models of discrimination

Peter Doering and Michael Piore. Labor markets may not be as flexible. Rigidities introduced by institutional arrangements and barious barriers to competition introduced by the monopoly power of firms is the product market or of firms or unions in he labor market.

Internal labor market

When firm-specific skills are emphasized and a high proportion of jobs are filled from internal sources. Determines wages for each job category and the allocation of workers among categories and is insulated to some extent (although not entirely) from the impact of market forces.

Dual labor market model

Peter Doeringer and Michael Piore. Primary jobs emphasize high levels of firm-specific skills and thus, pay high wages, offer good promotion opportunities, and encourage long-term attachment between workers and firms. Secondary jobs don't emphasize firm-specific skills, pay less, offer fewer promotion opportunities and have relatively high rates of labor turnover.

Institutional discrimination

Once men and women are channeled into different types of entry jobs, the normal, everyday operation of the firm-"business as usual"-will virtually ensure gender differences in productivity, promotion opportunities, and pay. Every gender difference in initial occupational assignment may be in part due to adherence to traditional practices that tend to work against women.

Feedback effects

Phelps. Discrimination against women in the labor market reinforces traditional gender roles in the family while adherence to traditional roles by women in the family provides a rationale for labor market discrimination. Also means that effective policies to end labor market discrimination can have far-reaching effects.

Equal Pay Act

Requires employers to pay same wages to men and women who do substantially equal work, involving equal skill, effort, and responsibility and performed under similar conditions in the same establishment.

Title VII of the Civil Rights Act

1964, Prohibits discrimination in employment on the basis of race, religion, and national origin and was amended at last minute to include the word sex in 1965.

Equal Employment Opportunity Commission (EEOC)

Federal agency charged with enforcing the Equal Pay Act and Title VII. May involve litigation over individual complaints but may also take the form of class action lawsuits.

Class Action Lawsuit

Lawsuits in which one or more individuals sue on behalf of a larger group of affected individuals. More efficient in that a larger group will be affected by the judgement in the case, although a larger case is likely to be more costly to prosecute.

Executive Order 11246

Issued in 1965 and amended in 1967 to include sex, bars discrimination in employment by all employers with federal contracts and subcontracts. Also requires that firms with federal contracts or subcontracts that have more than 50 employees and $50,000 in contracts take "affirmative action" for classees of workers disadvantaged by past discrimination.

Affirmative action

Refers to a set of proactive policies established by the firm that seek to provide equal employment opportunities and "to erase differences between women and men, minorities and nonminorities, etc."

Bona fide occupational qualification (BFOQ)

Exceptions permitted to the ban on gender discrimination when sex is found to be a BFOQ. Interpreted narrowly, 1977 Dothard v. Rawlinson hiring of only males for position of prison guard was permitted.

Disparate Treatment

Differential treatment with the intention to discriminate

Disparate impact

Unintentional discrimination, arises when apparently neutral practices or policies of a firm, say with regard to hiring or promotion, have disproportionately adverse effects on women or minorities.

1991 Civil Rights Act

Permits women to obtain compensatory and punitive damages for intentional discrimination, in addition to back pay. Allows cases to be argued before juries as well as udges.

Sexual Harassment

Making of sexual demands where a refusal results in an adverse action (quid pro quo harassment), to actions that are sufficiently offensive to result in a hostile work environment.

Corporate board quotas

Require corporate boards to reserve a percentage of seats on corporate boards for women. Norway 40% board quotas, less efficient in short run but more efficient in long run and. Not much of a trickle down to increased wages for female workers underneath them although the gaps in board representation between upper quartile and lower quartile firms decreases.

Comparable worth

The concept that women and men should receive equal pay for jobs calling for comparable skill and responsibility. Raising women's wages without changing the underlying conditions can have consequences with discrimination and displacement.

Job evaluation

Employers rely on such evaluations because of internal labor markets. Used by employers to determine wages as wages cannot be determined solely by the market. uses level of education, skills, responsibility, and multiple regression is used to link these to the existing pay structure.

Shared Consumption

Individuals derive greater utility from doing activities with those who have common interests.

Public Goods

Marriage allows for the enjoyment of this (goods that can be jointly consumed).

Economies of Scale

Two can live more inexpensively than they can separately. Cost of housing and food is usually much lower on a per-person basis if shared.

Risk-pooling

If one of them loses a job or wants to make a career switch, they can rely on the earning power of their spouse.

Marriage-specific capital

Skills and knowledge that are developed by an individual that are worth more within the marriage than if the relationship were to end. Specialization in nonmarket production and children.

Long-acting reversible contraceptive (LARC)

IUD, Contraceptive implants, etc have allowed women to focus on careers without risk of pregnancy.

Marriageable men

Men with decent earnings prospects. Absolute and relative earnings matter. High incarceration rates of men lower marriage rates among those with less education.

No-fault divorce

Spouse who is seeking a divorce does not have to show that the other partner did something wrong in order to obtain it.

Unilateral Divorce

Divorce can proceed if just one spouse seeks to terminate the marriage rather than requiring both spouses to agree to the termination.

Opposite-sex cohabitation

Increasingly common living arrangement. 57% of women aged 15-44 have cohabited at some point in their lives in 2013. Involves 2 individuals living in single household, but do not have property rights, Social Security, legal protections for property.

Serial cohabitation

Living with one partner and moving in with another. Recent trend 40% increase from 1995 to 2002, 26% increase in cohabitation overall.

Same-sex couples

Couples of same sex. Reap economic benefits with joint consumption and economies of scale.

Fertility

People's decisions about whether to have children and how many to have.

Demand for children

How many children they would like to have. Depends not only on benefits (or utility) they expect to derive from having chidlren but also on the costs of raising them, including the opportunity cost of time.

Opportunity cost of time

Income foregone during time spent in caring for children

Child quality

Includes investments parents make in the education and health of each of their children. May be enhanced by education or skill-related expenditures, health expenditures. Parents with a strong preference for child quality are likely to have fewer children because higher expenditures increase the costs of child quantity

Child quantity

Number of children.

Total fertility rate

An estimate of the number of births that a cohort of 1000 women would have if they experienced the age-specific brith rates occurring in the indicated year throughout their childbearing years. Provides an estimate of the average number of children a woman would have over her lifetime.

Baby boom

Period that lasted from the end of World War II until the early 1960s.

Baby Boomers

Those born during the Baby Boom 1946-1964. Fertility rate peaked at 3.7

Generation X

Cohort after baby boom, baby bust. Declined to 1.7

Millennials

1980-early 2000s. Largest cohort ever because so many women were of childbearing age.

Multipartner Fertility

When person has children with more than one partner. Increases complexity of family structure and complicates child support from noncustodial parents.

Dual-earner married-couple families

Both husbands and wives participate in the paid labor force. Dual income household employed couples' earnings are now 50% higher than just one employed spouse.

Single-parent families

Generally mothers and their children. Percentage increased mostly in 1990, most common among black families.

Positive Assortive Mating

When people with higher earnings tend to be married to one another.

Earned Income Tax Credit (EITC)

Refundable tax credit based on household earnings that both raises income and encourages individuals with low potential wages to seek employment. Transfers income into low-income households. Phase-in, stationary, and phase-out ranges depending on income.

Workforce Innovation and Opportunities Act (WIOA)

Provides funds for job training and job support services at the state and local levels. Too early to evaluate effectiveness.

Workforce Investment Act (WIA)

WIOA's prior program. Subject of considerable criticism as funding was so low it was ineffective.

Child support enforcement

Another strategy for aiding single-parent families. Has changed to better enforce payments. 1975, aimed at enforcing payments. 1984 and 1988 laws required states to adopt numerical guidelines in setting child support awards and allowing them to collect income withheld by employers (garnish wages) and retain income tax refunds from noncustodial parents who do not make the required payments. 1996 legislation instituted rules that make establishment of paternity faster and easier. 1998 passed penalties, almost up to 2 years in prison for "deadbeat" parents.

Child support assurance system

Patchwork of child support policies such as the one in Sweden, where both parents and the government are responsible for the support of children. Awards from nonresident parents could be set as a percentage of their income and withheld from their earnings, just as taes are. Government fills the financial gap so that the child receives at least minimum benefit.

Horizontal equity

The idea that taxpayers with similar abilities to pay taxes should pay the same amount. Those in similar circumstances should be treated similarly.

Progressive income tax

Higher levels of income are taxed at a higher rate than lower levels.

Secondary earner penalty

Married woman, who is generally considered to be secondary earner, will often face a high marginal tax rate on her potential income should she decide to enter the labor market. Labor market return to working is lowered, thereby reducing her incentive to enter the labor market.

Marriage Penalty

Additional taxes a couple owes if they are married compared to the taxes they would pay if they remained single.

Marriage bonus

Tax savings due to marriage compared to remaining single. Dual earner couples may incur marriage penalty while single-earner couples may receive a marriage bonus.

Social Security

Federal social insurance program instituted in 1935, provides retirement and survivor benefits as well as disability coverage for workers and their dependents.

Supplemental Security Income (SSI)

Provides cash benefits for the low-income elderly, combined benefits of SSI and EITC, two programs are generally insufficient to lift them out of poverty.

Fringe benefits

Additional benefits of employment beyond pay-such as paid leave and health insurance.

Earnings inequality

Gap between higher and lower-wage workers, discussed in earlier chapters.

Temporal flexibility

Flexibility in the timing and number of hours of work. Many professions, especially those requiring an MBA and law, impose considerable wage penalties for workers who prefer more wage flexibility.

Externalities

Benefits or costs that accrue to a third party when an economic decision is made. So, for example, when a consumer purchases a product such as a smoke alarm, neighbors also benefit.

Adverse selection

Refers to the tendency for those workers who need family leave or health insurance the most to seek out firms that offer these benefits; that is, workers will be adversely selected from the perspective of the firm's costs.

Equity

Fairness. Provides another rationale for government to play a role.

Pregnancy Discrimination Act

An amendment to Title VII of the Civil Rights Act of 1964, prohibits employers from discriminating against workers on the basis of pregnancy. This 1978 amendment prohibits discrimination but does not address the issue that pregnant women may need temporary accommodations during their pregnancy.

Family and Medical Leave Act (FMLA)

Allows eligible workers to take up to 12 weeks of unpaid leave for birth or adoption; acquiring a foster child; illness of a child, spouse, or parent; or their own illness.

Childcare

The care and supervision of small children. Quality childcare is a critical concern for most single parents and dual-earner couples with children.

Child Care and Development Block Grant

Provides states with funds to expand day-care services for low-income families, including those on welfare, as well as to improve the overall quality and supply of day care. States may provide part of these funds to childcare providers or give vouchers directly to low-income families who would then use them to buy childcare from an eligible provider or even from a friend or relative living outside their home.

Head Start

A program which is explicitly designed to provide early childhood education for low-income preschoolers. There are many states and localities that are investing into universal preschool programs as well. Oklahoma and Georgia were the first 2 states to do so, major cities include DC, Los Angeles and New York City.

Dependent Care Tax Credit

Operates on a sliding scale so that benefits decline as earnings increase. Nonrefundable, low-earner families who do not pay federal taxes do not benefit.

Flexible Spending Accounts

In firms that provide this option, employees may have money deducted from their paychecks for dependent care expenses on a pretax basis. Since they do not owe taes on the money set aside for this purpose, the costs of such care are thereby reduced.

Child Tax Credit

A tax credit which provides up $1000 for each child under age 17 in the family, though it phases out for higher-income families. Partly refundable, some benefit to families with lower earnings who do not pay federal taxes.

Flextime

Permits some variation in work schedules at the discretion of the employee, ranging from modest changes in starting and quitting times to varying the number of hours worked per day, week, or pay period.

Nonstandard work schedules

Where they are employed on alternating shifts, nights, or weekends. These scheduels have expanded considerably as economic activity has moved to virtually 24/7. Availability of technologies and the rise of dual-earner and single-parent families. In 2011 about 20% of all employed Americans worked a nonstandard schedule, 50% of employed time spent during the evenings, nights, or weekends.

Part-time employment

Common among women (as well as young people going ot school and older workers retired from their full-time jobs) and does offer some flexibility compared to a regular full-time job. Provides flexibility but offers few fringe benefits, poor compensation, and few opportunities for promotion.

Right to request policy

One where the worker can ask a supervisor for flexibility in terms of number of days, hours per day, or where work is performed, without fear of retaliation for doing so.

Job sharing

Two individuals share one position. For people seeking less than full-time work, this arrangement can be a good way to obtain a more attractive part-time position, while employers may find that this option helps them retain valuable employees. Disadvantage is that people who share jobs, like all part-time workers, may receive only partial benefits or none at all.

Home-based employment

More likely to be self-employed and more likely to be highly educated. Increase in home-based employment is due to increases in women's labor force participation increasing the desirability of home-based versus "office-based" work to better balance demands of earning a living and raising a family, and due to technology has made it increasingly possible for work to be conducted off-site.

Flexible benefit plans

Allow employees to select from an assortment of benefits worth up to a specified amount predetermined by the employer. They increase the value of fringe benefits to workers because workers can choose the benefits that best meet their needs. Thus, such benefits may provide a further inducement to individuals to enter or to remain attached to the labor market in general and to the firm in particular. For example, two-earner couples derive no benefit from the double health insurance coverage they receive when one or both are covered under their own employer's health insurance program and under their spouse's. With a flexible benefit plan, one of the spouses could instead choose to receive childcare benefits, contributions into a pension fund, or any one of the other benefits available.

Developing Countries

Middle and low-income countries.

Gender education gap

The difference between men's and women's education levels. Rising enrollment rates of girls in primary and secondary are main factors behind falling illiteracy rates and the decline in the gender education gap.

One-child policy

Severe economic penalties imposed by China for having more than one child. Resulted in fewer children but also in families killing female children and hiding their birth as to try for a male child.

Sex ratio at birth

Measure that conveys important information about the economic status of women in a given country. Expected to be even but higher for areas with femicide.

Missing women

Refers to the number of women who would be expected to be part of the population in the absence of gender discrimination resultig from sex-selective abortions, femicide, and the maltreatment of girls and women. Outright infanticide. Births of girls are underreported in some areas.

Son preference

Long-standing cultural preference for sons in these societies.