Welcome to Econ 325
Economics of Gender
Week 9
Beginning March 26
Monday, March 26
• Your appointments with me
• Part 3 of paper due on April 13
• 20 points
• Theories regarding the similarities
and differences
• Study Chapters 6 & 7
• ICA Wednesday
• Exam 2: next Monday
Midterm grades were
turned in yesterday
• Total possible points (excluding
part 2 of paper) = 143
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90% =A
80% = B
70% = C
60% = D
Below 60% = F
Don’t forget
Bonus Opportunity

Friedman Lecture
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Tonight
7:30 PM, McDonough Auditorium
Speaker: Dr. Steven Landsburg,
professor of economics at the
University of Rochester, will speak on
More Sex is Safer Sex, and Other
Surprises .
2 Bonus points for attendance
More bonus points for questions and or
a summary for MACRO & micro
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You can’t summarize unless you attend
E-E profile for
general/specific training
• Graph
All else being equal, it is
harder for firms to attract
employees to a job that offers
specific training compared to
a job that offers general
training
• So firms offer a higher initial
salaries to those who will
receive specific training.
• Employer’s share of cost
All else being equal, it is
harder for workers who have
received specific training to
find other employments than
those who have received
general training
• So firms offer a lower raises to
those who have received specific
training.
• Employer’s share of benefits
Who is more likely to quit
in order to look for
another job, a worker who
has received specific
training or one that has
received general training?
• If a worker who has received
specific training quits her job,
she can find a job that pays less
than her current job.
Why do firms prefer to
hire men for jobs that
offer significant specific
on-job training?
• They anticipate that women are less
likely to stay at the firm than men.
• Same cost, but lower benefits to
employers
• This behavior is called “Statistical
Discrimination”
Wednesday, March 28
• Your appointments with me
• Part 3 of paper due on April 13
• 20 points
• Theories regarding the similarities
and differences
• Study Chapter 7
• Exam 2: Monday
 How was Friedman Lecture?
 Who asked questions?
 Summaries due Friday before 5
PM via an attachment to an
email
ICA
• No ICA today
Other reasons for
gender wage gap
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Women’s priority is family (home
production)
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They don’t search for the best job and
take the first job (sometimes low
paying job) available
Go wherever their husband’s job takes
them  take a low paying job in the
new location
Their income is considered secondary
 anything is good  low paying jobs
Gender Discrimination
(Chapter 7)
• Exists when
• two equally qualified individuals
are treated differently, or
• a more qualified individual is
treated worse than a less qualified
individual,
• solely based on their genders.
Types of Discrimination
• 1) Same productivity – different
outcomes
• Example
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Pat & Chris are of two different genders
Both equally productive in Job “A”
Either Pat does not get the job, or
Pat makes less than Chris
If Pat already knows this, he/she is less
likely to invest on her/his human capital
 Pat will not go to school to learn how
to do Job “A” (feedback effect)
Types of Discrimination
• 2) Different productivity - different
outcomes
• Example
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Pat & Chris are of two different genders
Pat is more productive in job “A” than Chris
Either Pat does not get the job, or
Pat makes less than Chris
Results in misallocation of labor resources
and inefficiency in production
• Feedback effect
Types of Discrimination
• 3) Same productivity  different
productivity
• Example
• Pat & Chris are of two different
genders
• Initially Pat & Chris are equally
productive in Job “A”
• Because of discrimination Pat’s
productivity declines and so does her
/his real wage.
• Feedback effect
Empirical Studies on
Discrimination
• Table 7.1, page 205
• 1. Human Capital Differences
• Education
• Experience
• 2. Other Differences
• Occupations
• Industries
• Unionization
Empirical Studies on
Discrimination
• Other study
• About 32 % of wage differential is
explained by the difference in
human capital (mostly experience)
• About 67% of wage differential is
due to other factors (like what?)
Empirical Studies on
Discrimination
• Another study
• About 30 % of wage differential is
due to people with similar human
capital working in different
industries or occupation
Empirical Studies on
Discrimination
• Sample: University of Michigan Law
School Grads 15 Years After
Graduation
• Observation: Pay gap was small in
the beginning of their career
• 15 years later, women graduates
earned 60% of men’s salaries
• Reason?
• Shorter hours
• More interruptions
• Even after controlling for these
factors, men still earned 13% more
Friday, March 30
• Exam 2 on Monday
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Covers
Chapters 4, 5, 6, and 7 (Page 218)
Notes
Slides
ICAs/OCAs
End of Chapter Questions
• How are the papers shaping?
Excluded topics from
Chapter 4
1. Empirical Evidence on Income
and substitution effects (Page
113)
2. Economic conditions (Page
115)
3. The section starting with “The
World War II Experience” (PP
122-128)
Empirical Studies on
Discrimination
• Another study
• Gave men and women the same
resumes to apply for jobs
waiting on tables
• Probability of a female
applicant getting an interview
at high- priced restaurants was
40 percentage points lower
than male applicant
Empirical Studies on
Discrimination
• Another study
• Blind auditions by female
musicians increased their
chances of their selection
Empirical Studies on
Discrimination
• Another study
• Women were less productive
than men
• But the gap between male and
female salary was more than
the gap between their
productivity
Occupational
Segregation
• 1) Across industries
• most teachers are women and
most electricians are men
• 2) Within industries
• most nurses are women and most
doctors are men
Causes of Occupational
Segregation
• 1) Supply Side Factors
• Factors affecting supply of
male/female workers
• Human Capital Theory
• Feedback Effect
Causes of Occupational
Segregation
2) Demand Side Factors
• Factors affecting demand for
workers
a) Human Capital Theory
• Productivity
• Interruption in work life
• Short work life
b) Discrimination
Glass Ceiling
• Implicit barriers to promotion of
minorities
• Is there a glass ceiling?
• Old-boys network
• Male dominated corporate culture
• Stereotyped views:
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Balancing act
Family
Not aggressive/strong enough
Not good bosses
• Table 7.2, page 217
• Study the Federal Glass Ceiling
Commission’s report on page 218