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Estimating the Employment Effects of Wage Discrimination

Majorie Baldwin and William G. Johnson
The Review of Economics and Statistics
Vol. 74, No. 3 (Aug., 1992), pp. 446-455
Published by: The MIT Press
DOI: 10.2307/2109489
Stable URL: http://www.jstor.org/stable/2109489
Page Count: 10
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Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Estimating the Employment Effects of Wage Discrimination
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Abstract

If labor supply curves are not perfectly inelastic, wage discrimination induces some minority workers to leave the labor force. Studies of discrimination that focus only on wage differentials overlook these disincentive effects on minority employment. This article introduces a method of estimating the employment effects of wage discrimination and applies it to data on men and women from the 1984 Survey of Income and Program Participation. We find that wage discrimination against women caused a net loss of over four million jobs, supporting Becker's contention that discriminatory employers use labor inefficiently.

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