Wage Discrimination over the Business Cycle

Jeff Biddle and Daniel Hamermesh

No 6445, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Using CPS data from 1979-2009 we examine how cyclical downturns and industry-specific demand shocks affect wage differentials between white non-Hispanic men and women, Hispanics and non-Hispanic whites, and African-Americans and non-Hispanic whites. Women's relative earnings are harmed by negative shocks; the wage disadvantage of African-Americans drops with negative shocks, which have slight negative effects on Hispanics' relative wages. Negative shocks also increase the earnings disadvantage of bad-looking workers. A theory of job search suggests two opposite-signed mechanisms that affect these wage differentials. It suggests greater absolute effects among job-movers, which is verified using the longitudinal component of the CPS.

Keywords: race; ethnicity; gender (search for similar items in EconPapers)
JEL-codes: E29 J71 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2012-03
New Economics Papers: this item is included in nep-bec, nep-dem, nep-lab, nep-ltv and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published - published in: IZA Journal of Labor Policy, 2013, 2:7

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Journal Article: Wage discrimination over the business cycle (2013)
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