Cycles of Wage Discrimination

38 Pages Posted: 4 Sep 2011

See all articles by Jeff Biddle

Jeff Biddle

Michigan State University

Daniel S. Hamermesh

University of Texas at Austin - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

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Abstract

Using CPS data from 1979-2009 we examine how cyclical downturns and industry-specific demand shocks affect wage differentials between white non-Hispanic males and women, Hispanics and African-Americans. Women's and Hispanics' relative earnings are harmed by negative shocks, while the earnings disadvantage of African-Americans may drop with negative shocks. Negative shocks also appear to 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: women, minorities, beauty, search models

JEL Classification: E29, J71

Suggested Citation

Biddle, Jeff E. and Hamermesh, Daniel S., Cycles of Wage Discrimination. IZA Discussion Paper No. 5945. Available at SSRN: https://ssrn.com/abstract=1922017

Jeff E. Biddle (Contact Author)

Michigan State University ( email )

East Lansing, MI 48824
United States

Daniel S. Hamermesh

University of Texas at Austin - Department of Economics ( email )

Austin, TX 78712
United States
512-475-8526 (Phone)
512-471-3510 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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