Gender Discrimination Estimation in a Search Model with Matching and Bargaining

Luca Flabbi

No 1764, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: 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.

Keywords: maximum likelihood; search models; discrimination; gender differentials; estimation; structural estimation; affirmative action (search for similar items in EconPapers)
JEL-codes: C51 J64 J7 (search for similar items in EconPapers)
Pages: 62 pages
Date: 2005-09
New Economics Papers: this item is included in nep-lab and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Published - published in: International Economic Review, 2010, 51(3), 745-783

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Related works:
Journal Article: GENDER DISCRIMINATION ESTIMATION IN A SEARCH MODEL WITH MATCHING AND BARGAINING (2010)
Working Paper: Gender Discrimination Estimation in a Search Model with Matching and Bargaining (2004)
Working Paper: Gender Discrimination Estimation in a Search Model with Matching and Bargaining (2004)
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